These 10 US cities have the worst housing shortages, Zillow report says – LiveNOW from FOX

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Despite a pandemic construction boom, the shortage of available homes in the U.S. continues to grow – with the issue more prominent in some major cities compared to others, according to a new report from Zillow. 

An estimate reported by Zillow suggests that the U.S. was short 4.5 million homes in 2022, up from 4.3 million in 2021. Such a deficit is “the root cause” of the housing affordability crisis across America, the real estate market platform said.

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Zillow analyzed the 50 largest metropolitan areas and found many of the worst housing shortages are found in coastal cities. 

In fact, five of the 10 worst cities were located in California. 

Here’s what to know about housing availability in the U.S., including the worst markets:

Zillow: US cities with worst housing shortages 

Among the largest 50 metropolitan areas in the country, Zillow ranked the top 10 cities with the worst housing shortages. Many are coastal markets, which can play a role in housing availability due to geographic constraints to building, Zillow said. 

The report added how these cities also have “the most strict building regulations in the country.”

“Population growth also plays an important role in explaining differences in housing deficits across regions. Regions that attract the most newcomers — such as Austin and Seattle — will tend to see their housing deficit worsen, at least in the short run,” Zillow said. 

FILE - A view of the so-called Graffiti Towers, where graffiti writers tagged 40 floors of an unfinished luxury skyscraper development, on March 20, 2024, in Los Angeles, California. (Photo by Mario Tama/Getty Images)

FILE – A view of the so-called Graffiti Towers, where graffiti writers tagged 40 floors of an unfinished luxury skyscraper development, on March 20, 2024, in Los Angeles, California. (Photo by Mario Tama/Getty Images)

Here are the top 10 cities with the worst housing shortages:

  1. Boston
  2. Sacramento
  3. Portland
  4. San Diego
  5. San Francisco
  6. San Jose
  7. Seattle
  8. Minneapolis
  9. Los Angeles
  10. Austin

What’s causing the housing shortage?

The housing deficit is defined as the difference between the number of families who were likely to be seeking their own home – and the number of homes that were available for rent or sale. 

Despite an increase in home construction, the shortage of available homes has still grown, which Zillow attributed to the uptick in the nation’s family count, as well as a “very sluggish construction activity in the decade preceding the pandemic.” 

Zillow explained how the pandemic-era housing frenzy sparked a construction boom. In 2022, 1.4 million homes were built, which it called “the best year for home construction” since the early stages of the Great Recession in the late 2000s.

However, the number of U.S. families increased by 1.8 million that same year, meaning the U.S. “did not even build enough to make a place for the new families, let alone begin chipping away at the deficit that has hampered housing affordability for more than a decade,” Zillow said.

Homeownership ‘out of reach for too many families’

The housing market is driven by supply and demand, Zillow said – noting how when the number of people who want a home increases faster than the number of homes available, prices go up. 

The Great Recession ushered in “a decade of underbuilding.” Meanwhile, Millennials – who are the biggest generation in U.S. history — reached the prime age for first-time home buying, Zillow noted.

This has resulted in worsening home affordability, only exacerbated by stubbornly-high mortgage rates.

“The simple fact is there are not enough homes in this country, and that’s pushing homeownership out of reach for too many families,” Orphe Divounguy, senior economist at Zillow, said in a statement. 

“The affordability crisis extends to renters as well, with nearly half of renter households being cost burdened,” Divounguy added. “Filling the housing shortage is the long-term answer to making housing more affordable. We are in a big hole, and it is going to take more than the status quo to dig ourselves out of it.”

This story was reported from Cincinnati.

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