Tracking Housing Shortages Based on Q4 - 2024

The National Association of REALTORS® (NAR) has been tracking housing shortages across major metropolitan areas using its quarterly Housing Shortage Tracker index. This index measures the number of new building permits issued relative to job growth, helping to identify regions where housing supply lags behind demand. A higher index indicates that job creation is outpacing home construction. Historically, one single-family home permit has been issued for every two new jobs.



By the end of December 2024, nearly 93% of the metro areas monitored in the index had made progress in closing the housing supply gap by increasing the number of single-family building permits issued.

Areas with the Most Severe Housing Shortages:

• Buffalo-Cheektowaga-Niagara Falls, NY saw the most significant improvement, reducing its housing shortage index by 47.6%. The area went from issuing one permit per 17 new jobs in December 2023 to one permit per nine new jobs in December 2024.
• New York-Newark-Jersey City, NY-NJ-PA experienced a 43% improvement, shifting from one permit per 29 jobs in 2023 to one per 16 in 2024.
• Other cities with notable improvements include Syracuse, NY (-42.8%), Bridgeport-Stamford-Norwalk, CT (-42.7%), and Champaign-Urbana, IL (-32.9%).

Despite the overall increase in housing supply, 121 metro areas still faced housing shortages by the end of 2024, with indices above the historical average of two.

Metro Areas with the Highest Housing Shortages in Q4 2024:

• Urban Honolulu, HI had the most significant shortage, with just one permit issued for every 18 new jobs—a 31.9% improvement from the previous year, when the ratio was one permit per 26 jobs.
• Following closely were New York-Newark-Jersey City, NY-NJ-PA (16 jobs per permit) and Miami-Fort Lauderdale-West Palm Beach, FL (14 jobs per permit).
• Connecticut had three of the top 10 areas with the highest shortage indices: New Haven (14 jobs per permit), Hartford-West Hartford-East Hartford (11 jobs per permit), and Bridgeport-Stamford-Norwalk (9 jobs per permit).
• Anchorage, AK was the only newcomer to the top 10 list in Q4, issuing one permit for every 10 new jobs.

While all of the top 10 metro areas showed some improvement in housing availability, Anchorage, AK was the exception, seeing its shortage worsen from one permit per eight jobs in December 2023 to one per 10 jobs in December 2024.

Throughout 2024, affordability remained a major challenge in the U.S. housing market, primarily due to low inventory. Metro areas where housing supply was constrained by factors such as labor shortages, limited building permits, or zoning restrictions continued to be unaffordable for many potential buyers. However, as more homes are built, along with job growth and lower mortgage rates, affordability is expected to improve in 2025. NAR forecasts a 2%-3% increase in the median single-family home price in 2025, a more moderate rise compared to the 6% increase seen between December 2023 and December 2024.

For more insights, visit NAR’s Housing Shortage Tracker to see how your area compares.

Citations

Housing Shortage Tracker: Insights from the Final Quarter of 2024

Author: Anat Nusinovich

Published: Feb. 11th, 2025

Blog Link: https://www.nar.realtor/blogs/economists-outlook/housing-shortage-tracker-insights-from-the-final-quarter-of-2024

***NOTE: Housing Shortage Tracker as at the bottom of the page.***