Key Takeaways from Housing Supply Trends

The United States faces an acute shortage of homes both for rent and sale, resulting in increasingly unaffordable housing costs for families across the nation. The current undersupply is largely a result of the failure to build enough new homes over the past couple of decades. To provide more insight into our nation’s housing supply, BPC produced a housing supply data dashboard, using permitting and other housing data collected and analyzed by Rosen Consulting Group. This analysis provides key takeaways on national trends in housing permits and includes a state-by-state breakdown of permitting data for all 50 states.

See our state-by-state housing supply dashboard here.

Over the last 20 years, the annual number of new homes permitted in the United States has declined compared to previous decades, even as the population has increased by tens of millions of people. From 2000-2021, the U.S. had an annual average of 1,338,019 homes permitted, compared to 1,374,752 from 1960-1999—a decrease of 36,733 homes permitted annually or 2.6%.¹

All of the decrease came from multi-unit housing—with a particularly steep decline in permits for 2-4 unit buildings, often referred to as the “missing middle”—while single-family housing permits increased. As the graph below shows, new housing construction slowed substantially in the decade following the 2008 financial crisis, as demand for homeownership plummeted.

However, the population continued to grow, with an increase of 2.2 people for every new home—exacerbating the structural gap between the nation’s housing needs and its housing supply. When consumers emerged from the recession, developers were years behind in building up supply to meet the resurgence of demand—a pattern that risks repeating itself in the future as housing starts have slowed in recent months in response to high mortgage rates.

While the nation’s housing supply has not kept up with population growth or household formation, housing supply varies across the nation. Check out our state dashboards to see how your state has fared in building up housing supply in recent decades.