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U.S. Has a Shortfall of 6.5 Million Single-Family Homes Due to a Decade of Under-Building

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A decade of under-building has led to a shortfall of 6.5 million single-family homes in the U.S., according to a new report released Wednesday.

Realtor.com looked at household formation, housing starts, and home sales, and found that given how many households were formed between 2012 and 2022, the U.S. is short of 6.5 million single-family homes.

But that gap diminishes somewhat if households opted to live in multi-family construction, which has boomed. Including multi-family homes, the gap in housing units in the U.S. falls to 2.3 million homes.

Yet most of those multi-family units won’t necessarily provide a path to homeownership, said Hannah Jones, an economic analyst at Realtor.com.

‘Cooling buyer demand and builder confidence led to slower single-family construction and a shift in builder focus to multi-family last year.’ - Hannah Jones, an economic analyst at Realtor.com

“Cooling buyer demand and builder confidence led to slower single-family construction and a shift in builder focus to multi-family last year. While that brings greater supply to the market, most of it will be used for rentals and won’t address ongoing affordability challenges in the for-sale space,” Jones said.

Builders moved into building apartments, rather than single-family homes, “as the rental market remained profitable with nationwide rent hitting a new all-time high,” the report explained. “Through the first three quarters of 2022, an average 94.5% of all multi-family units started were intended to be used as rentals.”

Plus, “these homes take an average of 15 months to complete, and so their impact won’t be fully realized for some time,” Jones added, as compared to single-family homes that take on average 7 months to complete.

In 2022, the U.S. saw 2.06 million household formations, the report said. That refers to a group of people living together. Household formation affects the economy, as it drives demand for housing, and further down the line, spending on household appliances and furniture.

Affordability eroded homes become scarce and rates remain high

Between 2012 and 2022, there were 15.6 million households formed, Realtor.com said. Yet in this 10-year period, only 13.3 million housing units were started, and even fewer—11.9 million—completed.

Over that 10-year period, the rate of housing starts began to slow. Completions have climbed, yet they’re still not enough.

In 2022, about 1 million single-family homes were “started,” or rather, construction began on these homes. That’s 10.6% fewer than in 2021.

Multi-family starts were much higher, up 15% compared to 2021, reaching 545,000.

Amid this backdrop of a housing deficit, affordability has dwindled.

Just a tenth of new homes sold in the fourth quarter of 2022 were less than $300,000. That’s down from 41% of homes being below $300,000 in the fourth quarter of 2019.

“As inflation and mortgage rates likely soften later this year, buyers are likely to return to the market [and will be] in search of an affordable home, and the ongoing housing-supply shortage will only continue to put pressure on the market,” Danielle Hale, chief economist at Realtor.com, said.

Realtor.com acknowledges that its headline figure of 6.5 million “overstates the housing shortage,” since it doesn’t consider multi-family units as homes for buyers.

Learn more on Realtor.com

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2 Reasons for Doing Closing Paperwork in Person

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Closing on a property used to be a homebuyer rite of passage.

Sitting in a mortgage broker’s office, branded pen in hand, and signing seemingly hundreds of documents while wondering if you can steal yet another piece of candy from a bowl was the ritual everyone had to go through to own a little slice of the American Dream.

But closing remotely became standard as the pandemic progressed three years ago, and even though in-person activities have since returned, there are still buyers and sellers — and agents, too — who prefer virtual closings. 

Is this a good thing, as many remote shifts have been? Perhaps not. I spoke to three real estate professionals who shared why they still think it’s a good idea to do closing paperwork in person. Read on to find out why you might still want to do this milestone face-to-face. 

It’s a Person-to-Person Transaction

Closing on a house is something to be celebrated and commemorated, and there are conversations that could happen in the small talk between signing approximately 500 documents that add even more emotion to the process. 

“When our team is fortunate enough to represent a first-time homebuyer, we highly encourage an in-person closing,” Haley Cutter, with Boston-based Cutter Luxe Living, says. “This is an amazing milestone that our team loves to be a part of.”

“I had a recent closing where the seller was retiring and liquidating his investment properties. My buyers were new investors, and this was their first property. The seller took an hour after closing to talk to us about his successful investment strategy over the last 40 years,” Tarasa Hurley, a Realtor in Pittsburgh, says. She explains that this in-person interaction gave her clients a personal connection with someone they may not have met otherwise — and introduced them to someone who can offer years of wisdom and expertise. 

On another recent closing, adult children were selling their late mother’s home. Hurley describes the closing, “The mother lived a long life, but the children were still grieving. At the closing table, we found out that my clients had moved here to be part of the church that the mother helped found.” This personal moment created a connection that helped the children confirm that their mother would have been okay with the decision to sell the home — and the new residents.

She goes on to say, “My clients decided to keep the mother’s religious statue in the garden as a tribute. We had hugs and tears all around the table. Sometimes closings are not just financial; they create closure for families.”

Changes Can Be Made

“Simply put, signing closing paperwork in person allows margin for error. When the parties of the transaction sign in person with an escrow or closing agent, errors within the documents or a signature in the wrong place can be corrected instantly,” says Phil Greely, a licensed real estate agent in Seattle, pointing out the more practical reason to show up on closing day.

He explains that had a seller client scheduled to sign in-person, and, when the buyer’s agent opted to credit a small amount of money to the buyer, they had to adjust the documents and get the seller’s initials to approve the new terms.

“Because they were signing in person, the unsigned form was signed immediately during the scheduled signing. Had the seller been out of town or mailing documents back and forth, the closing date may have needed to be changed for this last-minute alteration,” says Greely.

Plus, both parties had a professional guiding them as they navigated the mountain of documents. Unless you buy and sell on a regular basis and these technical and legal terms never become second nature, having your agent by your site is a huge bonus. 

Read more on Apartment Therapy.

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Homes are getting smaller — which could improve affordability

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Newly built homes continue to lose square footage. But agents see an upside for buyers seeking more affordable options.

In the realm of new construction, builders are finding that affordability is now trumping pandemic space.

According to U.S. Census data and analysis by the National Association of Homebuilders (NAHB), the median square footage of a single-family home dropped to 2,203 in the fourth quarter of 2022, another dip from Q3 and the lowest level since 2011. 

It’s quite a turnaround from the early days of the pandemic, when people wanted more space because they were spending more time at home. 

But space and affordability are competing factors, and in a higher-interest-rate environment, affordability carries more weight, particularly for first-time buyers. “The tighter budget factor is likely to dominate in coming quarters,” said Robert Dietz, chief economist at NAHB.

According to the NAHB/Wells Fargo Housing Opportunity Index, only 38.1% of new and existing homes sold in the fourth quarter were affordable to families earning the U.S. median income of $90,000. That’s the third straight record low for the index, which began tracking the data on a consistent basis in 2012. It’s also a big drop compared to the fourth quarter of 2021, when the index was at 54.2%.

Affordability appears to play a role in home size. Prior to recent months, the trend over the past 25 years has been to build larger single-family homes, with two noticeable dips. 

The first dip was prior to the Great Recession, when home prices were skyrocketing. It happened again between 2016 and 2020 as the economy recovered, and construction companies could once again develop starter homes after years of running into funding challenges.

Finding buyers for smaller homes

Changes in land use policies have enabled the construction of more small homes — sometimes very small homes on a shared lot. In Kirkland, a city on the shores of Lake Washington near Seattle, Windermere broker Max Rombakh said he’s seeing different housing options after the city adopted zoning changes to address the shortage of mid-level housing, sometimes referred to as “missing middle housing.” 

The changes have resulted in more options for buyers and homeowners, including cottages and accessory dwelling units that are smaller but attractive to those looking for a good location, Rombakh said. 

“I would want to own the least expensive real estate in the most expensive neighborhood,” Rombakh said, adding that such homes tend to appreciate faster because of the location. The smaller homes Rombakh has seen also tend to have more upgrades, which is a major selling point.

“Ultimately the majority of consumers that are buying smaller homes are downsizers or starter families,” he said. 

While some new buyers are skeptical, purchasing a larger home that’s farther away can have other drawbacks. Plus, smaller homes mean lower utility bills and property taxes, as well as less maintenance.

One downside for some buyers: Smaller homes tend to only have a one-car garage — or no garage at all. “That’s usually the biggest hurdle we’re getting people over,” Rombakh said, adding that yards also tend to be smaller.

However, affordability is often a deciding factor, especially in a place like Kirkland, where the average home price can be in the $1 million range.

Keep reading.

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It's Denver Restaurant Week! Here's What You Need to Know

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With numerous food and beverage awards to its name, Denver has quickly become a dining destination for foodies.

You’ll find plenty of fine dining options at chef-owned eateries, along with cuisine from around the globe at our gourmet food halls and markets, and fresh, local ingredients like green chile and Colorado beef and lamb.

About Denver Restaurant Week

VISIT DENVER’s Denver Restaurant Week was initially designed to showcase Denver’s growing culinary offerings to local residents during a traditionally slow time of year; over the past 18 years, it has evolved to highlight what is now an award-winning, nationally recognized dining scene. 

Denver Restaurant Week will be held for 10 days March 3 – 12, 2023. The program will showcase the creative, exciting menus that diners have come to expect - with both to-go and in-person options. Once again, Denver Restaurant Week will include three price points: $25, $35, and $45 for a three-course meal. The program will also focus on advocacy for the industry while keeping the health and safety of the community top of mind.

All participants are listed on the Denver Restaurant Week website by neighborhood, cuisine and price. You can follow the link for a specific restaurant and see the menu, according to Mile High on the Cheap.

The fun of this food fest is checking out all the menus and then nabbing a spot at that restaurant you have always wanted to try, but couldn’t afford or hadn’t gotten too yet.

Many of the city’s hottest spots are on the list, as well as many neighborhood bistros. We have a list below.

Table fill up fast during DRW, so make plans soon. But be sure to cancel any reservations you don’t intend to use.

Also, while these delicious menus are great deals, be sure to still tip your servers generously.

Things to know about Denver Restaurant Week 2023

Days and hours of operation vary by restaurant. Please check the operating hours of the individual restaurants when making your plans.

Reservations are recommended wherever possible.

Menus are subject to change without notice based on product availability.

If you are unable to keep your reservation for any reason, please be considerate and cancel as soon as possible to give other diners and the restaurant the opportunity to fill those seats.

Please check with the individual restaurants in advance to inquire if they can modify certain items on their Denver Restaurant Week 2023 menu to accommodate dietary restrictions.

Please refer to www.denver.org/denver-restaurant-week for complete details.

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6 Plants That Definitely Belong in Your Bedroom

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Houseplants can be great for mental health — in fact, studies have shown that having plants and flowers in your space can ease pain and anxiety.

But whether or not they belong in the bedroom remains a matter of debate. Many feng shui practitioners say their vibrant energy is all wrong for a restful space, while some landscaping experts say plants in the bedroom can actually be soothing and sleep-inducing.

If you do put plants in your bedroom, you just need to choose the right ones and make sure they get the TLC they need. “All plants need sunlight, good airflow, water, etc., no matter where it lives,” says Lisa Griffin, the greenhouse horticulturist at Filoli, a historic house and gardens in California. “Choosing the right place for your plant should be based on its light requirements,” adds author Sarah Gerrard-Jones, known as The Plant Rescuer on Instagram.

So if you want to breathe new life and color into your sleeping quarters but aren’t sure where to start, here are six plants that experts say will make beautiful additions to your bedroom. 

Snake Plant

 
 

The snake plant is a welcome addition to the bedroom, especially if you have more intense light coming in through your windows. This durable plant holds up well to brighter light conditions and comes in a variety of heights, colors, and leaf shapes, says Griffin. She often adds snake plants near west-facing windows, where they’ll thrive on sunny afternoons, although she refrains from putting them directly in the beam of light, which could harm the plant. Snake plants also reproduce and can be split up into other pots if your plant starts to outgrow your windowsill.

Pink Pinstripe

When you need a bit of encouragement to drift off to sleep, take a cue from pink pinstripe, which is also known as calathea. “This plant signals that it’s time for bed as it folds its leaves upward,” says Debbie Neese, a horticulture expert at Lively Root. “It shows off under the pinstriped leaf to reveal a purple underside, which is like having two plants in one.” Calatheas are also an easy plant to take care of, as they love medium light and prefer to be on a pebble tray to encourage humidity as water evaporates, which keeps the leaves from turning brown.

ZZ Plant

 
 

If you’re looking for an appropriate bedside companion, try the wonderfully low-maintenance ZZ plant. Although the acronym comes from its scientific name, Zamioculcas zamiifolia, its nickname makes it a perfect match for your bedroom. ZZ plants are also great for first-time plant owners as they will flourish with little care. “They thrive in about any light you put them in and don’t need a lot of attention, either,” says Neese.

Gerrard-Jones recommends finding the dark cultivar of the ZZ plant. “The new growth is particularly striking due to its lime green appearance, which makes a dramatic contrast to the almost-black mature leaves,” she says. In addition, the darker plant with pops of lime green can be a beautiful accent to a bedroom color palette. 

Peace Lily

Peace lilies are a popular plant as their name evokes a sense of calm and rest. You can choose several species for your bedroom, such as the domino, which has variegated leaves. Griffin enjoys utilizing them both at her home and office. “Peace lily is my favorite plant for poor growing conditions,” she says. “They come in various sizes and a few different leaf colors.” For open spaces, she tends to use the traditional larger form, and for narrow areas, she says medium and small cultivars are best.

Philodendron

 
 

When plant experts weighed in, one plant was mentioned repeatedly: the philodendron, which has more than 450 varieties. The imperial green has wide leaves, creating a lot of surface area. “Its large, deep green leaves are adept at harnessing light, making it a good choice for an area with lower light,” Gerrard-Jones says. Just be sure you give this philodendron ample room as it grows, she says, as it can get big.

Have a ledge or shelf for a trailing plant? The velvet leaf and sweetheart vine philodendrons are lovely to hang in front of a window or place on a dresser. Gerrard-Jones says the velvet leaf can have tendrils up to 6.5 feet long indoors, so make sure you have room. Sweetheart vine, also known as lemon-lime, is tolerant of low to medium light and perfect for beginners. “Its trailing vine is a multi-lemon-chartreuse-green leaf version that will spill over your bedside table quite romantically,” adds Neese. 

Kentia Palm

For more of an island flair, the Kentia palm adds a tropical touch to any room. “It will survive in lower light than many of its counterparts,” says Gerrard-Jones. Although it’s a tolerant tropical plant, it still needs a bit of bright light, so place it by the window if possible. These plants grow slowly, but it’s best to make a long-term plan to move them outdoors as they can grow quite tall over time.

Get more like this on Apartment Therapy.

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