Understanding the Housing Gap: Uncertainty, Affordability, and Mobility Impact

America is experiencing a serious housing shortage, one that experts debate about how many homes are needed to resolve. Quantifying the nation’s housing needs remains a challenge, as the number of homes required to meet the demand depends largely on home prices, among other factors.

Experts estimate the number of homes needed to stabilize the housing market ranges from 3 million to 20 million. The rising cost of housing continues to keep many would-be buyers on the sidelines. Data support a decline in home purchases, as the National Association of Realtors (NAR) reports that existing-home sales are at 75% of pre-COVID levels and total home sales per 1,000 residents are at an all-time low.

Why Estimates Vary So Widely

Analysts at Goldman Sachs, Zillow, and Brookings, as well as congressional politicians, all differ in their methods for determining how many homes are needed to meet demand. Each analyst uses a combination of various criteria to reach their specific number, some of which includes:

• Available homes: The number of homes on the market
• Vacancy rate: The number of homes that sit unoccupied, and whether the supply is usable
• Affordability trends: Comparison of the cost of homes from a previous generation to the current one. According to NAR, 2025 saw record-high real estate asset valuations and mortgage debt, highlighting how much home costs have increased over the years.
• Household formation: How many potential households would form if home ownership weren’t as cost-prohibitive
• Homes per household: How many homes are needed to prevent overcrowding within single dwellings
• Regulatory constraints on supply: How many homes would have been built if there were fewer zoning, permitting, and land-use restrictions

The lack of a concrete number of homes needed to impact the housing market ultimately affects planning, particularly in markets with fewer homes and, at times, costlier ones.

Home Rental, an Alternative to Ownership

With home prices soaring, some in the market for homes are tapping into the built-to-rent market as an alternative route. Data shows that the average American family needs to make $110,000 a year to own a typical home. That’s about 29% higher than what the median household makes. But in a built-to-rent home, renters can experience the feeling of home without the responsibilities or costs that come with a mortgage. About 7% of new single-family houses hitting the market are now for rent, not sale. More than 10 times as many “build-to-rent” homes were completed in the U.S. in 2024 as compared with a decade earlier.

Can Federal Policies Close the Affordability Gap?

While supply may exceed current demand in some housing markets, this speaks more to an overall lack of homes within potential buyers’ price ranges than to an overabundance of supply. Buyers simply have fewer options for homes in their price range. To counteract rising prices, the federal government hopes to introduce two executive orders to help Americans secure affordable housing:

• Executive Order 1: The federal government would reduce its housing regulatory burdens and create incentives for state and local governments to adopt best practices, with the goal of making it easier for builders to construct more homes.
• Executive Order 2: This order would reduce the regulatory burdens tied to mortgages and make it easier for smaller community banks to provide home loans.

If passed, the executive orders would eliminate regulations and update programs affecting homes in residential areas. The orders do not seek to change state and local zoning codes, effectively preserving suburban housing and avoiding housing density.

What this Means for Global Mobility Professionals

For relocation and global mobility professionals, whether the housing shortfall is 3 million or 20 million, the outcome is the same: limited inventory will undoubtedly affect home prices. Over the past 5 years, NAR reports that several states have seen price jumps exceeding 70%, with a 4% increase in median home prices projected for 2026. Until the supply of affordable homes increases meaningfully, mobility professionals should continue to level-set with transferees to avoid surprises when home searches begin. Conversely, as the built-to-rent market heats up in areas such as Arizona, Utah, and Ohio, transferees could take advantage of other housing options if ownership is unfeasible for an assignment.

How CapRelo Can Help

For clients, ongoing housing shortages and costs may lead to longer home search timelines, higher temporary living expenses, greater reliance on renter support, and increased pressure to offer competitive relocation benefits to secure talent.

To support clients during periods of housing volatility, CapRelo gathers real-time data from our agents to quickly implement price adjustments as market conditions change. We establish appropriate fair market values and list prices at the outset to shorten time on market and reduce carrying costs. Additionally, we stay ahead of industry developments by communicating with clients about persistent housing inventory challenges, elevated interest rates, and other market factors affecting affordability and timelines.