While the ongoing inventory shortage in the US housing market is commonly attributed to increasing prices, home construction rates are also playing a part in keeping supply low, according to an analysis by Zillow.
US home construction rates continue to be below historic norms despite healthy and persistent growth. Zillow’s analysis revealed that the US housing market would have about 2.3 million more single-family homes built nationwide if permits were issued at historic rates over the last 10 years. At the current rate of 1.3 million per year, the difference marks almost two years of ‘lost’ building.
While there has been a steady increase in construction rates, building of single-family homes on a per capita basis still trails historical levels. Zillow noted that there has been a 33.5% decrease in the number of single-family residence building permits for every 1,000 residents to 2.6 currently from 3.9 for the period from 1985 to 2000.
With US housing stock staying in service longer and getting older fast, Zillow said that people are resorting to solutions such as having smaller families and doubling up. The analysis noted that there has been a drop in fertility rates particularly in areas with the fastest-growing home values. Also, the share of working-age adults living in doubled-up households has increased to 30% from a low of 21% in 2005.
Land Gorilla, Black Knight integrate to streamline construction loans
Metro home prices reach new peak amid growing competition