U.S. Housing Starts Lag Behind Demand

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The number of new housing units being built in the U.S. has declined in recent years, despite a growing need for more housing. Experts say the country needs to build 3-4 million additional homes beyond normal construction to alleviate the housing shortage, but housing starts have hovered between 1.3 million and 1.6 million annually. Factors like the lingering effects of the 2008 housing crisis and caution among builders and banks have contributed to the lag in new home construction.

Why it matters

The shortage of new housing has made stable and affordable housing precarious or out of reach for many Americans. While politicians and experts agree that building more housing should be a priority, there are still significant barriers to ramping up construction to the levels needed to address the crisis.

The details

In 2025, ground was broken on an estimated 1.36 million homes, a 0.6% drop from 2024. Many experts believe this is far below the number of starts needed to help address the housing shortage in the U.S. According to research by Goldman Sachs, the country needs to build '3-4 million additional homes beyond normal construction' to alleviate the housing crisis. To hit that mark, the number of annual housing starts would need to be closer to 2 million in the coming years.

• In 2004 and 2005, there were about 2 million annual housing starts.
• In 2025, ground was broken on an estimated 1.36 million homes, a 0.6% drop from 2024.

What they’re saying

What’s next

Politicians from Zohran Mamdani, the progressive new mayor of New York City, to Vice President JD Vance agree that building more housing should be a priority. President Trump has pledged to lower housing costs, but has not revealed a comprehensive plan for doing so. Gov. Gavin Newsom of California has scaled back cumbersome environmental reviews that make building in the state prohibitively expensive.