The supply of U.S.homes for sale is reportedly near a record low as the gap between supply and demand widens.
CNBC, citing new research from Realtor.com, reported Tuesday the nation is short 5.24 million homes, an increase of 1.4 million from the 2019 gap of 3.84 million.
According to the news outlet, census data found 12.3 million American households were formed from January 2012 to June 2021, but only 7 million new single-family homes were built during that time.
Household formation is when an individual moves out of a shared living situation.
A prime factor in the lag in single-family home construction is a labor shortage that began well before the COVID-19 pandemic, which then worsened it, the news outlet reported.
Supply chain disruptions in the past year have pushed prices for building materials higher, and as pandemic-induced demand soared, prices for land increased as well.
"The pandemic has certainly exacerbated the U.S. housing shortage, but data shows household formations outpaced new construction long before COVID," Realtor.com chief economist Danielle Hale told the news outlet. "Put simply, new construction supply hasn't been meeting demand over the last five years."
"Millennials, many of whom are now in their 30s and even 40s, have debunked the industry's 'renter generation' expectations."
Single-family home construction has been rising steadily since it bottomed in 2009 but is not as high as it was just before the housing boom, and is running at the slowest pace since 1995, CNBC reported, citing census data.
The snail pace comes as the largest generation enters its typical home buying years.
"Despite the extraordinary efforts of our trade partners, the supply chain issues that have plagued the industry throughout the pandemic have increased during the second half of the year," Ryan Marshall, the CEO of homebuilding giant PulteGroup, said in a statement, CNBC reported.
"We continue to work closely with our suppliers, but shortages for a variety of building products, combined with increased production volumes across the homebuilding industry, are directly impacting our ability to get homes closed to our level of quality over the remainder of 2021."
Other builders are citing the same issues, and stocks of the builders has been trading lower in recent days, CNBC reported.
With the shortage comes rising prices for new and existing homes — and at a record pace, CNBC reported.
For new construction, homes with a median value of $300,000 represented 32% of builder sales in the first half of 2021, down from 43% during the same period in 2018, the news outlet reported.
"No matter how you frame the scenario, it will take a more meaningful shift in the pipeline to meet demand in the foreseeable future," Hale told the news outlet.
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