Housing supply gap surpasses 4 million homes in 2025
n Construction fails to keep pace with demand
Realtor.com
News release
The U.S. housing supply gap widened to an estimated 4.03 million homes in 2025, increasing from 3.8 million in 2024, according to the 2026 Housing Supply Gap Report from Realtor.com, as new construction once again fell short of household formation and pent-up demand from younger households persisted.
In 2025, approximately 1.41 million households were formed, compared with 1.36 million housing starts. While the annual shortfall of roughly 50,000 units appears modest, it adds to more than a decade of underbuilding that has constrained supply, fueled home price growth and pushed homeownership further out of reach, particularly for younger Americans.
“Even when annual construction and household formation are roughly balanced, the market is still digging out from more than a decade of underbuilding,” said Danielle Hale, chief economist at Realtor. com. “A supply gap exceeding 4 million homes underscores how deeply rooted the shortage has become. Without a sustained and targeted increase in housing supply, particularly in areas with strong job growth and persistent demand, affordability challenges will continue to sideline many would-be buyers.”
2025 marks the third-largest annual deficit since 2012, trailing only 2020 and 2023. Although the largest single-year gap occurred in 2020 during pandemic-related disruptions, recent deficits reflect more persistent structural imbalances between supply and demand and
the difficulty of making sustained progress against the gap.
Pent-up demand intensifies shortage
The 2026 Supply Gap Report finds that 1.82 million Millennial and Gen Z households were “missing” in 2025, the highest count in four years. Among 18- to 44-year-olds, headship rates have declined over the past decade as high housing costs and limited supply have delayed independent living. The share of young adults living with parents was, on average, 2.7 percentage points higher by age than during the 2010–2014 period.
Affordability remains a key barrier. In 2025, the minimum recommended income to purchase a median-priced starter home was approximately $86,000, about $8,000 lower than the prior year, largely due to improved mortgage rates. However, that threshold remains above the earnings of many younger households. The median down payment reached $30,400, representing 14.4% of the purchase price, and it would take a median-income household seven years to save for a typical down payment at today’s savings rates.
Because headship includes both renters and homeowners, expanding affordable rental supply can also help ease constraints. Renting remains more affordable than purchasing a starter home in 49 of the 50 largest U.S. metro areas, reinforcing rental housing as a key pathway to independent household formation.
Regional gaps persist
Housing supply conditions vary significantly by region. The South carries the largest cumulative deficit at 1.62 million homes, followed by
“While construction levels remain elevated compared with historical norms, they are not yet high enough, or targeted enough, to meaningfully close the gap.”
— Hannah Jones, senior economic research analyst
the Northeast at 952,000, the Midwest at 865,000 and the West at 660,000.
However, when measured against cumulative construction since 2012, the Northeast faces the most acute shortage, followed by the Midwest, the South and the West. The Northeast was also the only region to see improvement in both its missing young households and overall supply gap in 2025, supported by housing starts reaching their highest level since 2015. Even so, the region remains the most supply-constrained on a relative basis.
Construction faces headwinds
Approximately 1.5 million homes were completed in 2025, a level that remains elevated by historical standards but below 2024’s pace. Single-family completions were essentially flat year over year, while multifamily completions declined. Total housing starts were relatively stable overall, though singlefamily starts fell to roughly 940,000, the lowest level since 2019, while multifamily starts rose to 415,000.
Builders continued to face structural challenges, including zoning restrictions, permitting hurdles, labor shortages and elevated material costs. Although the share of new home sales considered affordable rose from 45% in 2024 to 47% in 2025, and new home prices were steady year over year in the fourth quarter, affordability constraints continue to limit buyer activity.
Even under an optimistic
scenario in which construction increases 50% from the 2025 pace and pent-up demand fully dissipates, it would take roughly seven years to eliminate the current deficit.
Meaningfully closing the housing supply gap will require sustained increases in construction and a focus on building in areas where demand is strongest. Expanding access to affordable housing supply remains essential to restoring market balance and ensuring future generations have a realistic pathway to homeownership.
“While construction levels remain elevated compared with historical norms, they are not yet high enough, or targeted enough, to meaningfully close the gap,” said Hannah Jones, senior economic research analyst at Realtor.com. “The fact that it would take roughly seven years to eliminate the deficit even under an optimistic building scenario highlights just how significant and persistent this shortage has become.”
Let America Build effort
Realtor.com’s Let America Build campaign continues to spotlight the urgent need to expand housing supply through policy and regulatory reform. Launched at SXSW in 2025, Let America Build advances the national conversation on affordability and new construction barriers, and calls on lawmakers, builders, advocates and communities to remove red tape, modernize zoning and streamline permitting to accelerate construction where it’s needed most.
News release
The California Housing Finance Agency’s Dream For All Shared Appreciation Loan program began accepting applications for down payment assistance on Feb. 24. The application window will close on March 16. After that, applications will be selected and audited. Recipients of conditional approval will have 90 days to shop for a home.
The California Association of Realtors was instrumental in getting funding for CalHFA’s down payment assistance program.
The life-changing down payment assistance program, which offers first-generation homebuyers up to 20% of their home purchase price or appraised value in down payment assistance, will be using a random selection process to facilitate the equitable distribution of state funds.
CalHFA expects to make $150 million to $200 million available for 2026, and potential applicants should start getting ready now. The random selection process will include Gov. Gavin Newsom’s direction that at least 10% of the funding
goes to applicants in a Qualified Census Tract.
All borrowers must meet CalHFA’s Dream For All income limits and need to work with one of CalHFA’s Approved Lenders to get a Pre-Approval letter, prior to submitting their application. Other documents will be needed for submission, including a governmentissued ID and parent information; the complete list is located on the Dream For All webpage along with other valuable program information.
The California Dream For All program addresses the challenge of buying a home in California in several ways. First-generation homebuyers can receive a large enough down payment to eliminate the need for mortgage insurance and benefit from smaller monthly payments. The California Dream For All program’s shared appreciation loan will save the average homebuyer about $1,200 per month, according to California Forward, a nonprofit policy advocacy organization that prepared a report on shared appreciation for the California State Treasurer’s Office in 2022.
Homes that just Sold in your neighborhood
$1,075,500
Beautifully updated single-story home, where comfort meets elegance. Inside, you’ll fi nd an open-concept layout with soaring vaulted ceilings and a dramatic wall of fl oor-to-ceiling windows that fl ood the space with natural light and frame panoramic views of Marchini Ranch and the rolling Placerville hills. The gourmet kitchen features a spacious center island and brand-new stainless steel appliances perfect for everyday living and effortless entertaining. The home includes a private In-Law Quarters offering 793 sq ft of studio-style living, complete with handicap accessibility and its own breathtaking views ideal for guests, extended family, or a private retreat. Step outside to 10+ acres of usable land, approved for large animals and ideal for horses or livestock. A circular fi re road provides defensible space and peace of mind. Relax on the covered back deck while soaking in stunning sunsets, or explore the possibilities of the workshop below the home, complete with a roll-up metal door for storage, hobbies, or a home business. Tucked away in peaceful seclusion yet just minutes from Gold Hill Wineries, the South Fork of the American River, hiking trails, and all the beauty El Dorado County has to offer.
CUSTOM-DESIGNED HOME WITH FOLSOM LAKE & CITY VIEWS
meticulously designed open-concept floorplan perfect for both everyday living and square feet with in-law quarters on .49 acre in the beautiful Ridgeview Estates with This 6 bedroom house with 5 full baths and 2 half baths, featuring a Granite kitchen ovens and built in fridge, also includes Bar area, 2 fireplaces, formal living and a dining in pantry, laundry room, eat in kitchen decks of the main level of the home; a master bath, shower and walk in closet, plus 2 additional bedrooms with walk in closets and ensuites. throughout with travertine floors, trey ceilings, crown molding, craft area, bedrooms, workout room, and an in-law quarter with a separate entrance, kitchenette, walk in closet. Full outdoor patio. The resort-style backyard has a stunning Gunite pool with spa, with rock an amazing setting to enjoy Sunsets and views of Folsom Lake create an outdoor oasis. around the warmth of a fire pit roasting marshmallows. 512
Asking $2,080,000 MLS# 226017744
South Shingle Road, Shingle Springs, CA 95682
Located approximately 10 miles from El Dorado Hills and Hwy 50 is this breathtaking 40 acre parcel of land. The hilltop provides an amazing 360 degree panoramic view of the countryside. This site offers extensive public road frontage (no association dues), partial fencing, nearby electricity, and a natural land indentation suitable for a possible pond location.
$450,000
Listing #225151948
the home of your dreams with room to roam & then some!
Martinez
(916) 730-6544
Montridge Way, El Dorado Hills
Residential Homes
$508,000 6589 Primavera Ln 2 2 (2 0) 1137 0.1
226002508
$525,000 2960 Pasada Rd 3 3 (2 1) 1882 0.3 225140034
$539,000 2805 Alhambra Dr 5 3 (3 0) 1858 0.33 225126176
$560,000 3691 Hampton Ln 3 2 (2 0) 1712 0.49 225130313
$575,000 2435 Sandpiper Way 4 3 (2 1) 2096 0.25 225149100
$588,888 3569 Cambridge Rd 3 2 (2 0) 1494 0.31 226023584
$625,000 3571 Sudbury Rd 6 5 (4 1) 3054 0.31 226000067
$625,000 3980 Rustic Rd 3 2 (2 0) 1644 0.37 225105626
$649,900 3463 Orinda Cir 3 2 (2 0) 1711 0.34 226009461
$650,000 3937 Rustic Rd 3 2 (2 0) 1993 0.3 226021395
$650,000 2886 Knollwood Dr 3 4 (2 2) 1930 0.35 226012285
$669,000 2406 Knollwood Dr 3 3 (3 0) 2039 0.45 226015026
$712,999 2797 Alhambra Dr 3 3 (2 1) 2360 0.28 225099853
$739,500 2836 Clemson Dr 5 4 (3 1) 2677 0.26 226012572
$747,000 3708 Millbrae Rd 3 3 (2 1) 2300 0.38 226022968
$749,000 4683 Abrijo Rd 4 3 (3 0) 2195 0.23 226008056
$774,999 2948 Oakleaf Dr 4 3 (3 0) 2468 0.31 226019044
$795,299 7967 Stone Ranch Dr 4 2 (2 0) 2321 0.267 225143486
$835,000 3505 Fairway Dr 4 5 (4 1) 2363 0.37 226011972
$839,000 6007 Connery Dr 4 3 (3 0) 2915 0.23 226019548
$854,437 7850 Stone Ranch Dr 4 2 (2 0) 2321 0.23 225138155
$891,529 7878 Stone Ranch Dr 4 2 (2 0) 2515 0.222 225139619
$899,000 3257 Chasen Dr 5 3 (3 0) 3521 0.38 225147066
$965,000 3300 Woodleigh Ln 4 3 (2 1) 2690 0.55 225153945
$999,999 3810 Bilbao Ct 5 4 (4 0) 3173 0.26 225119102
$1,049,000 3184 Chasen Dr 5 4 (4 0) 4319 0.37 226007586
$1,090,000
226004449
$684,000 9067 Pomeroy Ln 2 3 (2 1) 1712 0.11 226001803
$699,500 7358 Grassy Creek Way 2 2 (2 0) 2229 0.14 226006441
$700,000 737 Cresta Ct 5 3 (2 1) 2096 0.32 226015697
$714,950 4975 Del Mar Dr 2 3 (2 1) 1504 0.14 225150364
$719,900 8536 Avelin Pl 2 3 (2 1) 1712 0.11 225153484
$725,000 9010 Fallsmont Dr 2 2 (2 0) 2229 0.15 226003267
$725,950 4977 Del Mar Dr 3 3 (2 1) 1642 0.14 226001419
$729,000 1041 Elmwood Ct 3 2 (2 0) 1751 0.28 226020301
$730,000 4537 Monte Mar Dr 2 3 (2 1) 2329 0.19 226005741
$749,000 513 Aspen Grove Ct 2 2 (2 0) 2010 0.15 226023747
$749,000 1814 Darwin Way 3 2 (2 0) 1849 0.27 2 26016618
$749,000 2007 Santa Rita Ln 2 2 (2 0) 1813 0.13 226013080
$750,000 1098 Yucca Dr
$750,000 699 Montridge Way
(3 1) 2100 0.11 226017170
225121138
$760,000 4820 Monte Mar Dr 2 2 (2 0) 2229 0.18 226002135
$769,950 4987 Del Mar Dr 3 3 (2 1) 1784 0.14 226001425
$770,000 1333 Downieville Dr 4 3 (3 0) 2061 0.21 226017179
$777,000 912 Yosemite Ln 4 3 (2 1) 2013 0.29 225147764
$799,000 9021 Fallsmont Dr 2 2 (2 0) 2229 0.14 226015361
$800,000 1244 Uplands Dr 3 3 (2 1) 1605 0.94 226016755
$819,900 2158 Beckett Dr 3 3 (2 1) 2457 0.18 225139534
$830,000 7137 Cinnamon Teal Way 3 3 (2 1) 2434 0.2 225109655
$839,000 4008 Avellano Dr 4 3 (2 1) 2190 0.17 226011848
$839,000 906 Landsdale Ct 3 3 (2 1) 2533 0.16 226019336
$839,900 6013 Ventura Way
$845,000 3182 Birmingham Way
$845,000 1247 Senegal Way
226008952
226001790
$849,000 2880 Springburn Way 4 2 (2 0) 2201 0.33 226020328 $849,000 8004 Damico
$2,199,000 5520 Sur Mer Dr 5 5 (4 1) 4762 0.45 226018701
$2,199,000 4182 Greenview Dr 4 4 (3 1) 3781 0.69 226010457
$2,199,000 3321 Greenview Dr 4 5 (4 1) 4420 0.4 226004271
$2,199,000 1781 Rocky Springs Ct 5 4 (4 0) 4199 5 225111030
$2,349,000 4930 Greyson Crk 5 5 (4 1) 4634 0.6 226021349
$2,388,000 4185 Greenview Dr 5 5 (4 1) 5250 0.61 226006268
$2,900,000 3215 Bordeaux Dr 4 4 (3 1) 4433 0.46 226001711
$2,950,000 3268 Bordeaux Dr 5 6 (5 1) 5084 0.52 226008543
$3,075,000 4970 Greyson Creek Dr 4 5 (4 1) 4762 0.56 226021163
$3,099,777 1401 Fredlena Way 4 4 (3 1) 5020 3 226018049
$3,100,000 4805 Moreau Ct 5 6 (5 1) 7144 0.73 226011087
$3,149,900 4934 Breese Cir 5 6 (5 1) 4669 0.71 226008182
$3,199,000 4245 Raphael Dr 4 6 (4 2) 4406 0.54 226003771
$3,250,000 721 Shoreline Pointe 5 5 (5 0) 7381 1 225096863
$3,299,000 4160 Raphael Dr 5 7 (6 1) 5379 0.52 225129104
$3,499,000 325 Kimberlite Way 4 5 (5 0) 4717 0.52 226007176
$3,500,000 4150 Raphael Dr 4 5 (4 1) 4602 0.53 225114344
$3,500,000 4000 Errante Dr 4 6 (5 1) 6245 0.58 225101925
$3,599,000
$3,900,000
$3,950,000
$4,200,000
$8,900,000
$2,349,000 4930 Greyson Crk 5 5 (4 1) 4634 0.6 226021349
$2,388,000
$2,900,000
$3,075,000
$3,099,777 1401 Fredlena Way 4 4 (3 1) 5020 3 226018049
$3,100,000 4805 Moreau Ct 5 6 (5 1) 7144 0.73 226011087
$3,149,900 4934 Breese Cir 5 6 (5 1) 4669 0.71 226008182
$3,199,000 4245 Raphael Dr 4 6 (4 2)
$3,250,000
$3,499,000 325 Kimberlite Way 4 5 (5 0) 4717 0.52 226007176
$3,500,000 4150 Raphael Dr 4 5 (4 1) 4602 0.53 225114344
$3,500,000 4000 Errante Dr 4 6 (5 1) 6245 0.58 225101925
$3,599,000
$3,795,000
5 (4 1) 5368 0.95 226013729
4 6 (4 2) 4523 0.52 226011688
$3,900,000 4141 Greenview Dr 6 7 (5 2) 7365 0.51 225111741
$3,950,000 101 Powers 7 8 (6 2) 9421 0.77 226011063
Residential Homes
12604 Residential Homes reScue / luneman
Residential Homes
Residential Homes
Residential Homes
12701 Residential Homes
Residential Homes
12801 Residential Homes
Residential Homes
12802 Residential Homes pollock pineS
One story duplex with garage separation on over an acre of usable land. Great Investor opportunity or live in one side while renting out the other side to pay for most of your mortgage. Very convenient location with lots of parking. Owner is willing to rent back parking space to make your Gross income over $50,000 per year. One unit was just nished last year and is completely new inside, upgrades include, Granite
and
Plank Vinyl ooring. the other was refurbished about 3 years ago. The Roof is re retardant and only 4 years old. The Electric panels and Ductless HVAC were replaced about 4 years ago. This is turn key! The exterior has newer Hardi-plank siding and new windows in front, and the entire home was freshly painted about 3 years ago. Think that Gold and the stock market has run it course, This is an investment that yields, monthly income, appreciation, leverage, equity build up and tax bene ts.
Licensed by the Department of Business Oversight under the California Finance Lenders law - #6073455. CA Department of Business Oversight - 866-275-2677. California - Bureau of Real Estate Branch Of ce License Endorsement #00988341 1-2026
