Dear reader,
Our weekly exploration of numbers that help us understand our world continues with a question at the center of the housing crisis: How much housing are we producing?
Over the past few years, the “yes in my backyard,” or YIMBY, movement has drawn many converts to the belief that sustained relief on the housing crisis won’t happen until the U.S. begins building more housing. But in many states and cities, the number of units being built still doesn’t come close to keeping pace with the growing need. For many, this undersupply makes stable and affordable housing precarious or out of reach.
Even in places where the need for housing is acute, the pace of building lags the demand. So we asked the reporter Alexander Nazaryan to break down the factors that are shaping one obscure but powerful measure: housing starts.
— Matt Thompson
What do the numbers say?
As soon as a shovel hits dirt, you have a housing start. The figures are published monthly by the FRED database at the Federal Reserve Bank of St. Louis, as a seasonally adjusted annual projection.
In 2025, ground was broken on an estimated 1.36 million homes, a .6 percent drop from 2024. Many experts believe that is far below the number of starts needed to help address the housing shortage in the U.S. “It’s been a disappointing year for home construction,” said Robert D. Dietz, chief economist at the National Association of Home Builders.
According to research by Goldman Sachs, the country needs to build “3-4 million additional homes beyond normal construction” to alleviate the country’s housing crisis. To hit that mark, the number of annual housing starts would need to be a lot closer to two million in the coming years. Some experts, however, think the extent of the housing crisis is not quite that severe. They recognize the existence of a housing shortfall but also worry about creating an oversupply, especially in the luxury sector.
Why don’t we just start building more homes?
Not all that long ago, two million annual housing starts did not seem like an especially heavy lift. But there is good reason for the much more cautious approach many today take toward building homes.
In 2004 and 2005, there were about two million annual housing starts, but the nation would pay a heavy price for the boom of those years. The Clinton administration relaxed financial rules, and when George W. Bush took office, his administration did not update regulations to keep pace with an increasingly complex mortgage marketplace. When the housing bubble burst in 2008, it caused the devastating global financial crisis.
Since then, builders and banks have tried to avoid the kind of speculation that brought the American economy to the brink. But that caution has taken a toll on housing availability. In recent years, starts have hovered between 1.6 million and 1.3 million, with a peak in 2021 when builders were responding to a surge in demand spurred by the coronavirus pandemic.
So what’s the state of the housing market?
Politicians from Zohran Mamdani, the progressive new mayor of New York City, to Vice President JD Vance agree that building more housing should be a priority. President Trump has pledged to lower housing costs, but has not revealed a comprehensive plan for doing so. Gov. Gavin Newsom of California has scaled back cumbersome environmental reviews that make building in the state prohibitively expensive.
Yet many solutions can feel like masking tape on the Titanic. “There are so many broken parts of the housing market right now,” said Ali Wolf, chief economist at Zonda. Dietz, of the home builders’ association, identifies these parts as five Ls:
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Labor: According to the Bureau of Labor Statistics, there are 292,000 construction job openings across the country. The need for laborers has allowed skilled workers to command higher wages. The median annual pay for a construction worker rose from $58,000 in 2020 to $66,400 in mid-2025, ADP Research found, despite the fact that productivity has not kept up. Trump’s immigration crackdown, which has limited the supply of construction workers, brought another unwelcome shock to the industry.
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Land: According to an N.A.H.B. survey from September, 64 percent of builders say that the supply of land to build on is “low” or “very low.” The median price of a lot for a single-family detached home has been rising for years and now stands at $60,000. Lot values are highest on the West Coast ($152,000), New England ($150,000) and the Mid-Atlantic ($97,000), all regions with housing shortages.
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Loans: Builders seeking loans for acquisitions, developments and construction often face skeptical lenders who are wary of fueling another housing bubble. So, while a mortgage may require a down payment as low as 3 percent, home builders often need to put down 20 percent for a loan, assuming a higher level of exposure. Interest rates are higher for builders, too: about 8 percent compared with 6 percent for home buyers.
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Lumber: The cost of construction materials has not recovered from pandemic-era shortages. In 2019, the price of lumber, measured in thousand board feet, was $350. It soared to $1,700 in early 2021 before falling to $570, where it stands today. Trump’s tariffs have also made aluminum and steel costlier.
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Legal: Legal fees account for about a quarter of what a newly built house will cost, according to Dietz, for an average of $93,870 per new single-family home. For that, you can partly thank arcane permitting laws and the nation’s more than 33,000 separate zoning jurisdictions. Notably, regulatory fees for a single-family home have jumped about $30,000 since 2011.
What can I read to learn more?
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Despite their many differences, liberals and conservatives are uniting around the concept of YIMBY.
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“Build, Baby, Build: A Plan to Lower Housing Costs for All,” a report from the Center for American Progress, discusses ideas like reimagining how homes are constructed and scrapping real estate “junk fees.”
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Operation Breakthrough was a pioneering American program in industrialized construction that enjoyed a brief but promising run in the 1970s. Today, modular housing is popular in Sweden and Japan.
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In New York City, officials are hoping tiny apartments help ease the housing crisis.
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A new law in Massachusetts designates some resort areas as “seasonal communities,” making it easier to build affordable homes for seasonal workers.
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The artificial intelligence economy can’t run without data centers, and data centers need a lot of land. That has presented a new challenge for housing developers.
— Alexander Nazaryan
Your turn
Test your knowledge: The Times recently reported on how the housing crisis has strained renters nationwide. According to a recent study by Harvard’s Joint Center for Housing Studies, approximately how many renters in 2024 were cost burdened (meaning they spent more than a third of their income on rent and utilities)?
Tell us your thoughts: How have you tried to build or buy a new home recently? If so, what was that like? Or perhaps you work in the industry and have encountered rising costs of materials. If so, let us know how you’re navigating that. Please email your thoughts to [email protected].
Following up: After last week’s newsletter on the homelessness numbers, news broke that Mayor Mamdani had decided to resume sweeps of New York City’s homeless encampments. The move followed a recent cold weather emergency that led to at least 20 deaths from exposure to air and snow. Also, results are in from a pilot program in Oregon that gave 120 homeless youths $1,000 in cash every month from February 2023 to January 2025. “By the end of the two-year period, 94 percent of participants reported they were housed,” OregonLive reported.
The Headway initiative is funded through grants from the Ford Foundation, the William and Flora Hewlett Foundation and the Stavros Niarchos Foundation (SNF), with Rockefeller Philanthropy Advisors serving as a fiscal sponsor. The Woodcock Foundation is a funder of Headway’s public square. Funders have no control over the selection, focus of stories or the editing process and do not review stories before publication. The Times retains full editorial control of the Headway initiative.
The post We Need More Houses. Why Aren’t More Being Built? appeared first on New York Times.
