- Builders constructed 1.225M new housing units from 2020 â€“ 2021
- This figure down from annual average of 1.5M new units from 1968 â€“ 2000
NAR Calling for â€œOnce-in-a-Generation” Policy Response to Countryâ€™s Housing Shortag
A newly released report from the National Association of REALTORSÂ® (NAR) â€œencouragesâ€ lawmakers to include housing investments in any infrastructure package they are considering.
Why?Â Because, according to NAR, the country needs â€an additional 5.5M housing units due to the discrepancy between an annual average of 1.5M new units from 1986 â€“ 2000 and the annual average of 1.225M new housing units build between 2001 â€“ 2020.
NAR is calling for lawmakers to generate a â€œonce-in-a- generation” policy response (with necessary fiscal backing via anyÂ infrastructure package to help alleviate the countryâ€™s housing shortage.
Composition of 5.5M Housing Deficit
David Bank, senior vice president of Rosen Consulting GroupÂ and one of the authors of this most recent NAR report, said, â€œThe scale of this problem is so largeâ€¦we need affordable (housing), we need market-rate, we need single-family, we need multifamily.
Specific housing types mentioned in this report include
- 2M single-family homes
- 1M units in buildings with 2 â€“ 4 units
- 4M units in buildings with at least 5 units
Supply Shortage Acute
NARâ€™s annual report on the State of the Nationâ€™s Housing also included the fact that from 2010 â€“ 2020, new home construction dropped -6.8M units short in the face of growing household formation and not replacing units that were aging or destroyed due to natural disasters.
The number of existing homes on the for-sale market dropped to 1.03M units as of the end of January 2021, a record low since 1982, according to NAR.Â By the end of April 2021, the number of for-sale existing homes totaled 1.16M, an annual decline of -20.5%.
New Home Construction Ramped Up to 1.38M Units in 2020
New homebuilders most definitely responded to strong demand in 2020 by building 1.38M new housing units, the most since 2006
However, challenges continue within the new homebuilding industry such as:
- Labor shortages
- Ready-to-build land
- Cumbersome and delaying zoning restrictions
- Rising material costs
- Supply chain delays
In fact, according to the National Association of Home Builders,Â more than 90% homebuilders have indicated shortages in framed lumber and appliances.
Action Needed & Time Frame to Shrink Housing Deficit
This latest NAR report states that homebuilders would need to exceed the historical average pace of building 1.5M housing units per year
NAR recommends a pace of 2.1M units per yearâ€¦and even at that pace, NAR indicates it would take a decade to shrink the existing gap of 5.5M housing units.
NAR is calling for lawmakers to craft several policy responses that would includeâ€¦
- Converting commercial buildings for residential opportunities
- Expanding the tax credit program for low-income rental housing
- Renovation of distressed properties
- City and state incentives to reduce regulatory limits on housing density.
Also, according to NAR, such proposals would create 2.8M jobs and generate more than $400B in economic activity.
Thanks to the National Association of REALTORSÂ® and The Wall Street Journal.
URGENT: 2021 Results Released. New FREE On-Line Web Event Reveals 17 Surprising Secrets Of The Top 100 Millionaire Agents. Get Your FREE Spot For The On-Line Webinar Now. When You Attend This Event You Will Have A Sense Of Relief Knowing You Can FINALLY Laugh At Your Money Worries – If You Follow This Simple Plan. Learn How To Generate 100’s of Motivated Leads Without Coming Off As A Pushy Salesperson and Losing Your Soul. Learn Now How To Become One of the 1000s of Agents Making HUGE Money NOW Who Never Thought They Could.
P.S. Limited Space Available. 235 Spots Left.