The U.S. housing supply gap widened to 4.03 million homes in 2025 due to persistent underbuilding and strong household formation. About 1.41 million new households formed versus 1.36 million housing starts, creating a shortfall. This long-term shortage fuels price pressure and delays homeownership, especially for younger buyers. Even with increased construction, it could take years to close the gap and improve affordability.
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