The Housing Shortage, Explained by 2024 Data

New NAHB estimates provide a reasonable updated national assessment of the current housing deficit.

In 2024, vacancy rates in metropolitan markets were so low that NAHB estimates approximately 1.2 million additional housing units are needed to close the gap and restore rates to their historical norms.

Contingent on sustained home building activity, NAHB's baseline forecast suggests an adjustment could occur between 2026 and 2030.

Homeowner and Rental Vacancy Rates are Key Indicators of Housing Market Tightness

• In 2022, U.S. rental vacancy rates fell to 5.1%, the lowest level in decades.
• That underscores the severity of the post-pandemic housing shortage. To set a baseline, rental vacancy rates averaged 6.6% since 2005.
• A surge in multifamily construction in 2024 led to improved rental availability across many metro areas. The national vacancy rate rose to 5.7% but remained below historic norms.

For-sale housing shortages persist nationally, too.

• Single-family construction remains significantly constrained by structural barriers, including restrictive zoning regulations, limited land availability and persistent land shortages.
• Homeowner vacancy rates continued to decline through 2023, reaching a record low of .8%. 
• While improving modestly in 2024, owner vacancy rates still remain below 1% compared to the post-2005 average of 1.8%.

Which Areas Have the Highest Rental Vacancy Rates?

Parts of the country with mobile labor markets and higher population turnover consistently experience higher vacancy rates. Vacation destination housing markets also have higher vacancy rates, reflecting the volatile seasonal housing demand.

• According to NAHB’s estimates, the rental vacancy rates in Panama City and Sebastian-Vero Beach, FL, have hovered around 20% since 2005.
• Myrtle Beach, SC, has seen even higher vacancy rates, fluctuating around 28%.

Which Areas Have the Lowest Rental Vacancy Rates?

• NAHB estimates show many areas in California — including Santa Maria-Santa Barbara, Santa Cruz-Watsonville, San Jose-Sunnyvale-Santa Clara, Oxnard-Thousand Oaks-Ventura, and Los Angeles-Long Beach-Anaheim — all registered long-term rental vacancy rates below 4%.

Where are Homeowner Vacancy Rates Highest?

Homeowner properties tend to have lower vacancy rates given the slower housing turnover, as owners move in and out less often compared to renters. 

• Several metro areas along the coast of Florida have reported the highest long-term owner vacancy rates, including Sebastian-Vero Beach and Naples-Immokalee-Marco Island, FL, which have seen rates fluctuate around 4% since 2005.
• In comparison, San Jose-Sunnyvale-Santa Clara, CA, predominantly has vacancy rates below 1%.

Note that, in this context, the vacancy rate is the proportion of vacant units for sale within the combined stock of homeowner-occupied, sold but not yet occupied, and for-sale units. Vacation and seasonal properties are excluded.

Where are the Biggest Rental Unit Shortfalls?

Large metro markets have the greatest shortage of vacant rental and for-sale units because of their size. 

• As of 2024, the Chicago-Naperville-Elgin, IL-IN-WI metro area needed 40,000 rental units to bring the rental vacancy rate back to normal levels.
• Shortages in the New York-Newark-Jersey City, NY-NJ, and Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro areas were around 20,000 units.

For more information, including interactive maps of rental and for-sale unit shortfalls in 2024, check out this Eye on Housing post.