The current market's elevated prices has been blamed on a housing shortage, but a new study showed the country has ample homes in the market but lacks enough affordable units for lower income Americans.
A recent study published by the University of Kansas examined Census Bureau data from 2000 to 2020, comparing the number of households formed to the number of affordable housing units added during that period.
The researchers found that, of the nation's 381 metropolitan area, only four experienced a housing shortage between 2000 and 2020. Additionally, the study also found that of the 526 "micropolitan" areas---or those with about 10,000 to 50,000 residents---only 19 experienced a housing shortage.
Furthermore, the study examined very low income households---those who earn between 30% and 60% of the area's median family income---and extremely low income households---with incomes below 30% of the area's median family income---and found that nearly all metropolitan areas have shortages of affordable rental units.
As of May 2024, the median price of a home in the US was $439,716, according to Redfin. The average rent price as of June 2024 is $2,129, per Zillow.
"There is a commonly held belief that the United States has a shortage of housing. This can be found in the popular and academic literature and [that] from the housing industry. But the data shows that the majority of American markets have adequate supplies of housing available. Unfortunately, not enough of it is affordable, especially for low-income and very low-income families and individuals," Kirk McClure, professor of public affairs & administration emeritus at KU and one of the writers of the study, said.
"This condition suggests that we cannot build our way to housing affordability. We need to address price levels and income levels to help low-income households afford the housing that already exists, rather than increasing the supply in the hope that prices will subside," he continued.
How Other Studies Compare
A separate study published by Zillow estimated that the US was short 4.5 million homes in 2022 despite a boom in residential home construction activity following the pandemic. In fact, the study noted that just under 1.4 million units were built that year.
The Zillow study also found that the number of available homes fell in 2022 by 3.8% compared to 2021 to 3.55 million vacant homes. The national vacancy rate at the time also fell to 2.5%, which marked a multi-decade low. Meanwhile, the number of individuals who preferred to live on their own increased to 8.09 million.
