“A mix of new starter-homes for first-time buyers and larger homes for families looking to trade up is needed at this moment to ensure homeownership opportunities remain in reach to qualified prospective buyers at all ages and income levels,” Yun said.

NAR Compares Job Gains to Permits

A NAR study examined new home construction relative to job gains over a three-year period between 2013 and 2015 in 171 metro areas. Historically, the average ratio for the annual change in total jobs to permits is 1.6 for single-family homes. NAR's research found that 80% of markets had a ratio above 1.6 (indicating that new construction was inadequate for the market's needs) with an average ratio of 3.4 (indicating that the new construction was grossly inadequate for the market's needs).

The top 10 metro areas that need the most single-family housing starts to get back to the historical average ratio are:

1. New York, where 218,541 permits are required.

2. Dallas, which needs 132,482 permits.

3. San Francisco, which lacks 127,412 permits.

4. Miami, short 118,937 permits.

5. Chicago, where 94,457 permits are needed.

6. Atlanta (93,627 permits)

7. Seattle (73,135)

8. San Jose, Calif. (69,042)

9. Denver (67,403)

10. San Diego (55,825)

WASHINGTON, DC–The US is in the midst of a quiet but significant housing shortage crisis that is worsening the perma issue of affordability in the US and could, if left unchecked, force first-time home buyers to remain renters for years longer than they would like.

To be sure, this situation has been brewing ever since the job sector began its slow but steady recovery several years ago. “Without the expected pick-up in building as job gains rose in recent years, new and existing inventory has shrunk, prices have shot up and affordability has eroded despite mortgage rates at or near historic lows,” says NAR chief economist Lawrence Yun in a prepared statement.

An (Un)Virtuous Circle

However, some number crunching by the Washington DC-based National Association of Realtors teases out a new irony: namely some cities are stuck in an (un)virtuous cycle in which the job is healthy enough to keep attracting more potential home owners but the limited pace of construction won't allow supply to catch up with the growing demand. Indeed, with so many potential homeowners relegated to renter status, growth in these cities' housing markets could remain stunted for years.

“A mix of new starter-homes for first-time buyers and larger homes for families looking to trade up is needed at this moment to ensure homeownership opportunities remain in reach to qualified prospective buyers at all ages and income levels,” Yun said.

NAR Compares Job Gains to Permits

A NAR study examined new home construction relative to job gains over a three-year period between 2013 and 2015 in 171 metro areas. Historically, the average ratio for the annual change in total jobs to permits is 1.6 for single-family homes. NAR's research found that 80% of markets had a ratio above 1.6 (indicating that new construction was inadequate for the market's needs) with an average ratio of 3.4 (indicating that the new construction was grossly inadequate for the market's needs).

The top 10 metro areas that need the most single-family housing starts to get back to the historical average ratio are:

1. New York, where 218,541 permits are required.

2. Dallas, which needs 132,482 permits.

3. San Francisco, which lacks 127,412 permits.

4. Miami, short 118,937 permits.

5. Chicago, where 94,457 permits are needed.

6. Atlanta (93,627 permits)

7. Seattle (73,135)

8. San Jose, Calif. (69,042)

9. Denver (67,403)

10. San Diego (55,825)