The US Housing Crisis - Housing Shortage

MoveZen Property Management

The US is currently facing a severe housing shortage - roughly 6.5 million homes are needed.

This demand is causing rent and home prices to skyrocket.

3 Causes for The Shortage

01 Long Term Underbuilding

02 Institutional Investors

03 Outdated Zoning Laws

1 in 7 households paid more than half of the income on housing in 2020



Limited bank backing, the rise in material costs, labor shortages, and the need to pay living wages has put many builders out of business or slowed production. 

With interest rates on the rise and many Americans out of reach of buying, banks are limiting their funding by nearly 50% forcing builders to halt large quantity production.

In 2022 construction costs had an inflation rate of 14.1%

Since COVID with the increased need for higher wages and the shift away from manual labor, construction growth has lagged from the inability to find skilled or willing employees. 



In 2021 Investors accounted for more than 13% of residential real estate purchases. The continued high demand for housing allowed them to profit from rental proceeds while limiting the available purchasable homes creating bidding wars beyond the average home buyers reach.

3 Major Factors For Rent Inflation

Increased demand from those unable to buy / transplants via the great pandemic migration. 

Extreme Supply Shortage

The rise in interest rates/home prices

Outdated Zoning Laws


One of the largest factors in the supply shortage - outdated zoning laws. 

Large, densely populated cities are aiming for they skies but not without a fight. Locals are resisting the increase in high rise apartment buildings. And cities are facing infrastructure challenges that leave little space for growth.  

Rural communities outside of major city limits are also pushing back stating their way of life will be disrupted. These local governments are zoning land for single family use on large lots only in an effort to push back on building multi-family and affordable housing options. 

These zoning laws in parts of the country are inhibiting access to better schools, transportation, and jobs to those looking for a better life and resources. 

Read more on the housing shortage crisis and how to rectify the problem.  

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