Affordability may be the reason
of ConsumerAffairs
Home builders are stepping up the pace of home construction to shrink the housing shortage. The current estimate is the U.S. needs an additional 4.5 million homes.
The latest analysis from Zillow shows that approximately 1 million homes were completed in 2023, marking the second-highest annual total since before the global financial crisis. This figure represents an 11% increase compared to 2019.
But for people looking for a detached, single-family home, the news is not so good. Data show that builders have shifted their focus towards higher-density housing, such as townhomes, rather than detached single-family homes, a trend similar to that seen in 2022.
Construction starts for detached single-family homes fell by nearly 9% from 2022 to 2023 but starts for attached single-family homes townhouses increased by over 3% during the same period.
"The housing affordability crisis continues to affect America, stemming from decades of underbuilding," said Orphe Divounguy, Zillow's senior economist. "Despite recent efforts by builders, the demand for homes remains unmet.
Divounguy says the best long-term solution is increasing supply and that builders are contributing by adopting more cost-effective and space-efficient designs.
'Promoting density through local legislation'
However, promoting density through local legislation is crucial to providing affordable homes where they are most needed," Divounguy said.
The median size of a new home is still around 2,200 square feet, but the median lot area has decreased by 700 square feet compared to 2022 again, another sign of an increase in townhouse construction.
According to Zillow, the latest data show the construction pace is slowing, a likely response to falling sales. In 2023, construction began on 946,000 single-family homes, about 7% fewer than in 2022 and 16.5% fewer than in 2021.
The markets issuing the most single-family permits since 2020 include Houston, Dallas, and Phoenix, a trend that is promising for housing affordability in these areas that have been stretched by population growth.
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Here's where the most single-family construction has been permitted since the pandemic |
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Metro Area |
Single-family permits |
Single-family home value change |
|
Houston, TX |
232,810 |
39% |
|
Dallas, TX |
207,471 |
47% |
|
Phoenix, AZ |
138,445 |
54% |
|
Atlanta, GA |
128,202 |
59% |
|
Austin, TX |
94,361 |
43% |
|
Charlotte, NC |
87,987 |
61% |
|
Orlando, FL |
76,355 |
55% |
|
Tampa, FL |
74,265 |
62% |
|
Nashville, TN |
70,850 |
50% |
|
Jacksonville, FL |
65,510 |
53% |
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-10-21 14:10:35
