New Data Reframes U.S. Housing Shortage

New analysis shows the housing gap has narrowed, signaling a shift in construction demand toward renovation and regional activity.

construction worker framing a building — Photo by Josh Olalde on Unsplash

The U.S. housing shortage might not be as large as many in the industry thought—a shift that could influence how wall and ceiling contractors think about future growth.

A recent blog post, "The U.S. Housing Shortage is Smaller Than Commonly Claimed," written by Lilli Tillman Smith, industry analyst at Principia Consulting, and Eric Gaus, Chief Economist at Dodge Construction Network, examines how this new view affects labor planning, material procurement, and equipment investment.

According to Dodge Construction Network, the housing shortage peaked in mid-2022 at about 2 to 3 million units. Since then, it has dropped to around 1 to 1.5 million units, based on vacancy rates.

Affordability remains a problem, but it is mostly due to high financing costs, construction expenses, and land-use rules, not just a lack of available homes. Vacancy rates for both rentals and owned homes are starting to level out.

For wall and ceiling contractors, this signals that future opportunities may lean less on a dramatic wave of new residential construction and more on renovation, tenant improvements, adaptive reuse projects, and regional market activity.

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Tanja Kern covers economic trends and the intersection of architecture, design, and construction for Walls & Ceilings, with an emphasis on the forces reshaping the industry. She develops and amplifies content that connects construction professionals with the intelligence they need to compete and grow.

With more than 20 years of experience, Tanja has written for national business, consumer and trade publications. She holds a Master of Science in magazine publishing from Northwestern University's Medill School of Journalism. She can be reached at kernt@bnpmedia.com.