The Big Picture of the Housing Shortage

If you want to see why housing is so hot right now, take a look at the trends over the past decade. The number of occupied housing units (otherwise known as households, which are housing units with people in them) grew faster than the total number of housing units. Consequently, the number of vacant housing units fell between 2010 and 2020. 

Percent change in total, occupied, and vacant housing units, 2010 to 2020

Total housing units: 6.6%

Occupied housing units: 8.5%

Vacant housing units: -8.6%

The housing crunch differs by metropolitan status. In the nation's metropolitan areas, the number of households grew faster (up 9.9 percent) than the number of total housing units (7.9 percent) between 2010 and 2020. In nonmetropolitan areas, the number of households declined during the decade (-1.1 percent) but the number of total housing units fell even more (-2.7 percent). 

In both metro and nonmetro areas, then, the number of vacant housing units fell—a 9.4 percent drop in metro areas and an 8.4 percent decline in nonmetro areas. Consequently, no matter where you live or where you want to live, there is less housing to choose from and more competition for those seeking a home. 

Source: Census Bureau, Housing Growth Highest in Urban Cores of Fast-Growing Metros

822,000 New Single-Family Houses Sold in 2020

822,000: that's the number of new single-family houses sold in 2020—the most since 2006 and more than twice the number sold a decade ago in 2010, in the aftermath of the Great Recession.  

The median sales price of new single-family houses sold climbed to $336,900 in 2020. While this was higher than the median price in 2019, it was less than the 2017 record high of $341,200, after adjusting for inflation...

Median sales price of new single-family houses sold, 2005 to 2020 (in 2020 dollars)

2020: $336,900

2019: $325,500

2018: $336,400

2017: $341,200 (record high)

2016: $331,900

2015: $321,300

2011: $261,400 (post Great Recession low)

2010: $263,300

2005: $319,200 (pre Great Recession high)

Nearly all (96 percent) of new single-family homes sold in 2020 were air conditioned. This figure is up from 63 percent in 1978, the first year of the Census Bureau's data series. 

New single-family houses sold in 2020 had a median of 2,333 square feet, almost identical to the 2,322 median size in 2019. In 2015 and 2016, the median size of new single-family houses sold exceeded 2,500 square feet. 

Source: Census Bureau, Characteristics of New Housing

States with the Oldest and Youngest Housing Stock

The age of the housing stock varies dramatically across the country. States with an older housing stock are those that have been densely settled for generations. States with a younger housing stock are the ones that have experienced recent rapid growth. 

In the United States as a whole, 12.3 percent of housing units were built in 1939 or earlier (80-plus years ago), according to the Census Bureau's 2019 American Community Survey. But in some states, the figure is more than twice as high...

The five states with the largest percentage of housing units built in 1939 or earlier

1. District of Columbia: 32.8%

2. Massachusetts: 31.6%

3. New York: 31.1%

4. Rhode Island: 30.3%

5. Pennsylvania: 25.9%

At the other extreme, only 4.6 percent of housing units in the U.S. were built recently—within the past five years. But the figure is nearly double that in a few states...

The five states with the largest percentage of housing units built in 2014 or later

1. North Dakota: 9.0%

2. Texas: 9.0%

3. Utah: 8.9%

4. Idaho: 8.0%

5. South Carolina: 7.7%

Source: Census Bureau, American Community Survey Ranking Tables

Price of New Single-Family Homes Falls Again

Home prices fell again in 2019. The median price of new single-family houses sold fell 3 percent between 2018 and 2019, after adjusting for inflation. This was the second year of decline since the price peaked in 2017.

Median price of new, single-family homes sold (in 2019 dollars)
2019: $321,500
2018: $332,314
2017: $336,989 (all-time high)
2009: $258,235 (post-Great Recession low)
2005: $315,350 (pre-Great Recession high)
2000: $250,906

Home prices fell despite the fact that the number of houses sold climbed to 683,000 in 2019—the largest number since 2007 and 11 percent more than in 2018. One factor that may explain the price decline is the smaller size of houses sold. The median square feet of floor area in new single-family houses sold in 2019 fell to 2,322, which is 113 square feet smaller than the 2018 median. This is the largest square-footage decline in the Census Bureau's series, which dates back to 1978.

Source: Census Bureau, Characteristics of New Housing

You Think You've Got Cabin Fever?

The average housing unit in the United States has a median of 1,500 square feet of living space, according to the Census Bureau's American Housing Survey. With more than two people in the average household, each of us can lay claim to a median of 700 square feet. Those 700 square feet are feeling pretty cramped these days.

Of course, some of us are packed in tighter than others. Take the residents of the New York metropolitan area, for example. The average housing unit in New York has a median of 1,150 square feet of living space—580 square feet per person. It's even tighter in San Francisco, at 550 square feet per person. For householders under age 25 in San Francisco, per capita living space is just 350 square feet.

Percent distribution of households by square footage of housing unit
Under 1,000: 23%
1,000 to 1,499: 26%
1,500 to 1,999: 21%
2,000 to 2,999: 21%
3,000 or more: 10%

Young adults have the smallest homes. Householders under age 25 live in housing units with a median of just 925 square feet—or 475 square feet per person. Middle-aged and older Americans have the largest homes. Householders ranging in age from 45 to 74 live in homes with a median of 1,600 square feet. On a per capita basis, people aged 65 or older have the most room to roam—a median of more than 900 square feet per person.

Source: Demo Memo analysis of the Census Bureau's 2017 American Housing Survey

Housing Problems Loom for Older Americans

Entrepreneurs take note. Over the next two decades, prepare for explosive growth in the number of households headed by people aged 65 or older. According to projections by the Joint Center for Housing Studies (JCHS), the number of householders aged 65 or older will expand by 53 percent between 2018 and 2038. The number aged 80 or older will more than double. By 2038, more than one-third (34 percent) of the nation's households will be headed by people aged 65 or older and one in eight (12 percent) will be headed by people aged 80 or older.

The rapid growth in the number of older householders creates problems and opportunities. The problem is that too many older Americans live in housing unsuited to the needs of the aged, according to the JCHS report, Housing America's Older Adults 2019. Fully 80 percent of homeowners aged 65 or older, live in detached, single-family homes. "The majority of these homes are now at least 40 years old and therefore may present maintenance challenges for their owners," says the report.

And that's not all. Many older householders live in low-density communities, making it difficult for them to care for themselves as they age. "The growing concentration of older households in outlying communities presents major challenges for residents and service providers alike," the report warns. "Single family homes make up most of the housing stock in low-density areas, and residents typically need to be able to drive to do errands, see doctors, and socialize."

But problems like these create opportunities. "The need for affordable, accessible housing and in-home supportive services is set to soar," concludes the report.

Source: Joint Center for Housing Studies of Harvard University, Housing America's Older Adults 2019

Solar Panels Most Popular in Pacific States

How many of the nation's houses have solar panels? The 2017 American Housing Survey has the answer. Overall, 3.1 million occupied housing units in the United States had solar panels in 2017—or 2.6 percent of the total. This is the percentage of homes with solar panels by census division...

4.0% in New England
2.2% in Middle Atlantic
0.7% in East North Central
0.6% in West North Central
1.5% in South Atlantic
0.6% in East South Central
1.5% in West South Central
3.8% in Mountain
7.4% in Pacific

The 2017 American Housing Survey also asked about solar panels on houses in selected metropolitan areas. Here are the findings: in Riverside-San Bernardino, 9.7 percent of homes had solar panels; San Francisco 6.9 percent; Phoenix 6.5 percent; Los Angeles 5.0 percent; Atlanta 1.0 percent; and Seattle 0.8 percent.

Note: To see which states are in which census division, click here.
Source: Census Bureau, 2017 American Housing Survey

Forty Years of Bigger Houses

New single-family houses have been getting bigger. Those built in 2017 had a median of 2,426 square feet of floor area. While this is not the record high, it's close. The record was set in 2015 when new single-family homes had a median of 2,467 square feet...

Median square feet of floor area in new single-family houses completed
2017: 2,426
2016: 2,422
2015: 2,467 (record high)
2007: 2,277
1997: 1,975
1987: 1,755
1977: 1,610

Single-family homes built in 2017 are 51 percent larger than those built in 1977.

Source: Census Bureau, Characteristics of New Housing

Stocks Account for Bigger Share of Wealth

Stocks are a growing share of the wealth of middle-aged Americans, according to an analysis of the Survey of Consumer Finances by the Federal Reserve Bank of St. Louis.

In 2016, stocks accounted for 11 percent of the net worth of householders aged 41 to 60, more than double the 4 percent of 1989. Vehicles also grew in importance, with their share of the household wealth of the middle-aged rising from 14 to 19 percent. In contrast, the share of net worth accounted for by the principal residence of middle-aged householders fell from 46 to 37 percent during those years.

Despite the rising importance of stocks to the middle-aged, stock ownership is increasingly concentrated among the wealthy. In 2016, fully 78 percent of the stock market wealth of middle-aged Americans was owned by the wealthiest 10 percent of households—a record high.

Source: Federal Reserve Bank of St Louis, How Has Stock Ownership Trended in the Past Few Decades?

2012 Square Feet in Average American Home

The nation's 118 million occupied housing units contain a total of 238 billion square feet of space, according to the Energy Information Administration's 2015 Residential Energy Consumption survey. That's an average of 2,012 square feet per home. The average size of occupied housing units varies by a number of factors, including...

Region: The smallest homes (1,685 square feet, on average) are in the Pacific states (Alaska, California, Hawaii, Oregon, and Washington). The largest homes (2,337 square feet) are in the West North Central states (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota).

Climate: The smallest homes are in mixed dry/hot dry climates (1,665 square feet). The largest homes are in very cold/cold climates (2,239 square feet).

Year built: The smallest homes were built in the 1950s (1,866 square feet). The largest homes were built during the housing bubble—from 2000 to 2009 (2,381 square feet).

Household income: The average size of homes rises with household income. The smallest homes are those whose residents have a household income below $20,000 (1,325 square feet). The largest homes are those whose residents have a household income of $140,000 or more (3,051 square feet). On a per capita basis, the poorest households have 602 square feet per person and the richest households have 1,018.

Source: Energy Information Administration, 2015 Residential Energy Consumption Survey

Who Has Trouble Staying Warm?

Among the nation's 118 million households, a substantial 31 percent reported having problems paying their energy bills or maintaining adequate heating and/or cooling in their home in 2015, according to the Residential Energy Consumption Survey. The survey defined energy insecurity as experiencing at least one of five heating/cooling problems—reducing or forgoing food or medicine to pay energy costs; leaving the home at an unhealthy temperature; receiving a disconnect or delivery stop notice; unable to use heating equipment; or unable to use cooling equipment.

Most low-income households are energy insecure. Energy insecurity is much greater among low-income Americans. Among households with incomes below $20,000, the 51 percent majority reported being energy insecure in 2015—that is, they experienced at least one of the five problems. The figure fell to 34 percent among households with incomes of $40,000 to $60,000, which is close to the national median. Among households with incomes of $140,000 or more, only 8 percent reported energy insecurity.

Climate doesn't matter. Among households located in very cold/cold climates, 30 percent reported energy insecurity. Among those in hot/humid climates, 34 percent reported energy insecurity.

Insulation cuts the problem in half. Among those who report that their home is well insulated, only 23 are energy insecure. Among those whose homes are poorly insulated, 49 percent are energy insecure.

Mobile homes are the worst. Among those who live in single-family detached homes, 27 percent report being energy insecure. The figure is about the same for those in apartment buildings with five or more units (30 percent). But for those in smaller apartment buildings of two to four units, a much larger 46 percent are energy insecure. For mobile homes, the figure is a whopping 59 percent.

Source: U.S. Energy Information Administration, Residential Energy Consumption Survey, One in Three U.S. Households Faced Challenges in Paying Energy Bills in 2015

Boomers May Have A Debt Problem

Debt is a growing burden for Boomers nearing retirement. That's the prognosis of a National Bureau of Economic Research study, which examined three cohorts of Americans approaching retirement using data from the Health and Retirement Study—the original HRS cohort (born from 1931 to 1941), War Babies (born from 1942 to 1947), and Early Boomers (born from 1948 to 1953). With each succeeding cohort, debt has grown...

Percentage with debt and median amount of debt at age 56 to 61 by cohort (in 2015$)
HRS cohort: 64% ($6,750)
War babies: 70% ($31,250)
Early boomers: 71% ($32,700)

Mortgages are the biggest reason for rising debt among older Americans. The percentage of 56-to-61-year-olds with mortgage debt grew from 41 percent in the HRS cohort to 49 percent among Early Boomers, the researchers report. Mortgage debt is growing because each succeeding cohort has purchased more expensive homes with smaller down payments. The median value of the homes owned by Early Boomers at ages 56 to 61 was $218,000 versus the $187,000 for War Babies and the $144,000 for the HRS cohort (in constant dollars). Early Boomers were also more highly leveraged at ages 56 to 61 than were the other cohorts. Mortgage debt relative to housing value was 30 percent for Early Boomers versus 22 percent for War Babies and just 5 percent for the original HRS cohort.

"Debt among older persons may increasingly be a factor in elder bankruptcy, and even in determining lifetime wealth sufficiency and retirement security," the researchers conclude. "Our research suggests that analysts and policymakers should explore ways to enhance debt management practices as they examine factors driving retirement security."

Source: National Bureau of Economic Research, Debt and Financial Vulnerability on the Verge of Retirement, Working Paper 23664 ($5)

Regional Trends in Median Sales Price of New Single-Family Houses Sold

Nationally, the median sales price of new single-family houses sold climbed to a record high of $316,200 in 2016. But records were set in only two of the four regions—the Midwest and South.

Northeast: $448,200 in 2016 (not a record)
The Northeast has the highest median sales price for new single-family homes sold. But the 2016 median was less than the $465,400 of 2015 (in 2016 dollars), which is the record high.

Midwest: $284,400 in 2016 (record high)
The median sales price of new single-family homes sold in the Midwest hit a record high of $284,400 in 2016. This was 7 percent above the pre-Great Recession high of $266,600 in 2005, after adjusting for inflation.

South: $284,000 in 2016 (record high)
The median sales price of new single-family homes sold in the South hit a record high of $284,000 in 2016. This was 13 percent above the pre-Great Recession high of $252,000 in 2005, after adjusting for inflation.

West: $381,300 in 2016 (not a record)
The median sales price of new single-family homes sold in the West climbed to $381,300 in 2016. While this is 40 percent greater than the post-Great Recession low of $273,100 in 2011, after adjusting for inflation, it's 5 percent below the record high of $402,000 recorded in 2006.

Overall, 561,000 new single-family houses were sold in 2016. The Northeast accounted for 6 percent of the total, the Midwest 12 percent, and the West 25 percent. The 57 percent majority of new single-family houses sold were in the South.

Source: Census Bureau, 2016 Characteristics of New Housing

Median Sales Price of New Single-Family Houses Sold Hits Record High of $316,200

For the second year in a row, the median sales price of new single-family houses sold climbed to a record high. The $316,200 median in 2016 was 5 percent greater than the $300,100 of 2015, after adjusting for inflation.

From just $235,500 in 2000, the median price of new single-family houses sold climbed rapidly in the early years of the 2000s as the housing bubble inflated, reaching a high of $296,000 in 2005 before collapsing. From that peak to the post-Great Recession low of $242,400 in 2011, the median sales price of new single-family houses sold fell 18 percent, after adjusting for inflation. Between 2011 and 2016, the price climbed 30 percent.

Median sales price of new single-family homes sold, 2000 to 2016 (in 2016 dollars)
2016: $316,200 (record high)
2015: $300,100
2014: $286,700
2013: $277,000
2012: $256,300
2011: $242,400 (post Great Recession low)
2010: $244,100
2005: $296,000 (pre Great Recession high)
2000: $235,500

Source: Census Bureau, 2016 Characteristics of New Housing

Air Conditioning, 1976 and 2016

Global warming skeptics should take a look at the Census Bureau’s report, 2016 Characteristics of New Housing. The proof of global warming begins on page 8 of the 751-page statistical report. Fully 93 percent of new single-family homes completed in 2016 had air-conditioning, including more than 8 out of 10 new houses in the Northeast. Not so in 1976, when only 49 percent of all new single-family homes completed (and just 13 percent in the Northeast) had air-conditioning. Here is the 40-year trend by region...

Total U.S.
2016: 93%
1976: 49% 

Northeast
2016: 86%
1976: 13%

Midwest
2016: 94%
1976: 40%

South
2016: 100%
1976: 78%

West
2016: 78%
1976: 29%

Source: Census Bureau, 2016 Characteristics of New Housing

Home Equity Accounts for 32% of Net Worth

The median net worth of the average household was $80,039 in 2013, according to a recently released report from the Census Bureau's 2014 Survey of Income and Program Participation.

The 2014 SIPP includes improvements to questions designed to measure net worth, with new, topic-specific questions about types of assets such as annuities, trusts, businesses owned as investments, and educational savings accounts. Without these changes, notes the report, median net worth may have been as low as $74,083. The revised survey also included a question about student loans.

Here is the composition of net worth for American households, excluding households in the top 1 percent of net worth because their asset ownership is unlike the average...

Composition of household net worth, 2013
Home equity: 32.2%
401(k) accounts: 16.3%
IRA and Keoghs: 10.5%
Stocks, mutual funds: 9.6%
Assets at financial institutions: 9.4%
Business or profession: 5.2%
Rental property: 4.4%
Other real estate: 3.9%
Motor vehicles: 3.3%
Annuities and trusts: 3.0%
Cash value life insurance: 2.8%
Other assets: 3.6%
Unsecured liabilities: –4.7%

The 55 percent majority of households have unsecured liabilities, which include credit card debt,  student loans, medical debt, etc. Overall, 42 percent of households have credit card debt, with a median of $3,000 owed. Twenty percent of households have student loans, and those that do owe a median of $18,000.

Source: Census Bureau, Improvements to Measuring Net Worth of Households: 2013

Age of Housing Stock by Metropolitan Area

The average American household lives in a housing unit with a median age of 39, built in 1976, according to the 2015 American housing survey. The AHS collected information about housing in the nation as a whole, in the 15 largest metro areas, and in 10 additional metros. Here are those 25 metros ranked by the age of their housing stock from youngest to oldest.

Occupied housing units: median year built (and age of average structure)
Raleigh: 1996 (19 years)
Atlanta: 1991 (24 years)
Phoenix: 1989 (26 years)
Dallas: 1987 (28 years)
Riverside-San Bernardino: 1986 (29 years)
Houston: 1985 (30 years)
Washington, DC: 1981 (34 years)
Denver: 1980 (35 years)
Memphis: 1980 (35 years)
Miami: 1980 (35 years)
Seattle: 1980 (35 years)
Portland: 1979 (36 years)
Kansas City: 1975 (40 years)
New Orleans: 1974 (41 years)
Cincinnati: 1972 (43 years)
Chicago: 1968 (47 years)
Detroit: 1967 (48 years)
Boston: 1957 (58 years)
Los Angeles: 1964 (51 years)
San Francisco: 1964 (51 years)
Cleveland: 1958 (57 years)
Philadelphia: 1963 (52 years)
Milwaukee: 1961 (54 years)
New York: 1957 (58 years)
Pittsburgh: 1957 (58 years)

Source: Census Bureau, 2015 American Housing Survey

Changing Age Distribution of Homeowners with Mortgages

Homeowners with mortgages are getting older, report researchers from the Federal Reserve Bank of New York. Analyzing CoreLogic and CRISM data, the researchers examined changes over the past decade in the age distribution of mortgage borrowers and the housing equity held by borrowers. The finding: older Americans (aged 61 or older) account for a growing share of mortgage borrowers as home buying slips among younger adults.

Distribution of mortgage borrowers in 2016 (and 2006)
Under age 45: 31% (42%)
Aged 45 to 60: 42% (43%)
Aged 61-plus: 27% (15%)

Source: Federal Reserve Bank of New York, Liberty Street Economics, The Evolution of Home Equity Ownership

Projections of Homeowners and Renters to 2035

Since the bursting of the housing bubble in 2006, the homeownership rate in the United States has slumped, the number of homeowners has fallen, and the number of renters has surged. Will these trends continue, or will homeownership make a comeback? That's what the Joint Center for Housing Studies wanted to know. To answer the question, JCHS researchers created three sets of housing tenure projections to determine the range of possible homeownership trends through 2035.

1. Base scenario: According to this scenario, if homeownership rates by five-year cohort remain at 2015 levels, then the homeownership rate in 2035 will be almost identical to the 63.5 percent of 2015. But even with the same rates, the number of homeowners will grow more than the number of renters during the 2015-to-2035 time period, largely because of the aging of the population. Between 2015 and 2035, the number of homeowners would expand by 15.7 million and the number of renters by 9.4 million.

2. Low scenario: In this scenario, homeownership rates continue to decline until 2020 at the same rate of decline as occurred for five-year cohorts between 2010 and 2015, then remain constant through 2035. The additional years of declining rates would drive the overall homeownership rate down to 60.6 percent by 2035. The number of homeowners would increase, but not as much as renters. Between 2015 and 2035, the number of homeowners would expand by 11.5 million and the number of renters by a larger 13.5 million.

3. High scenario: In this scenario, homeownership rates for five-year cohorts recover and by 2035 return to the 1995 rates for most cohorts. The 1995 rates, say the researchers, "define the pre-boom levels that might reflect a longer-term equilibrium." The overall homeownership rate would rise slightly to 64.7 percent by 2035. The number of homeowners would grow much more than the number of renters. Between 2015 and 2035, the number of homeowners would expand by 17.7 million and the number of renters by 7.4 million.

Which of these scenarios is most likely? The fate of the housing market is at stake, with developers of rental housing poised to benefit from the low scenario and homeowners themselves poised to benefit from the high scenario. You decide.

Source: Joint Center for Housing Studies of Harvard University, Homeowner Households and the U.S. Homeownership Rate: Tenure Projections for 2015–2035

Age of Housing Stock by Region

The average American household in 2015 occupied a housing unit with a median age of 39, built in 1976. The age of the housing stock varies greatly by region...

Occupied housing units: median year built (and age of average structure)
Northeast: 1959 (56 years)
Midwest: 1971 (44 years)
South: 1984 (31 years)
West: 1978 (37 years)

Source: Census Bureau, 2015 American Housing Survey