A new report from the National Association of Realtors revealed a slowdown in construction over the past twenty years—primarily due to focus on single-family homes rather than multi-family houses. The result: a 5.5-million-unit shortfall.
Construction companies built an average of 1.5 million units every year between 1968 and 2000. Since then, construction has averaged only 1.225 million.
“We need affordable [housing], we need market-rate, we need single-family, we need multi-family,” said David Bank, senior vice president of Rosen Consulting Group one of the report’s authors.
The report found that construction is short approximately 2-million single-family homes, one million two-to-four unit homes, and two million buildings with at least five units.
The report also estimated that, because of aging or demolished dwellings, the shortfall could be as high as 6.8 million.
Residential home builders are working at a record pace but lack labor and materials. A shortage of new land also hampers the construction of new units. The National Association of Retailers states that even if construction could keep up its breakneck pace (building 2.1 million units this year), a decade of building might not be enough to catch up with demand.