New housing has not kept up with the steadily improving pace of job growth, according to a National Association of Realtors study.
From 2012–2014, 63 percent of measured metropolitan areas had an annual change in total workers to total permits ratio above 1.2 (the historical average) for all housing types, which means inadequate new construction, according to the study.
Single-family housing was no better—72 percent of metros showed a ratio above the historical average of 1.6.
“In addition to slow housing turnover and the diminishing supply of distressed properties, lagging new home construction—especially single family—has kept available inventory far below balanced levels,” said Lawrence Yun, NAR chief economist, in a statement. “Our research shows that even as the labor market began to strengthen, homebuilding failed to keep up and is now contributing to the stronger price appreciation and eroding affordability currently seen throughout the U.S.”
The markets with the largest ratio of jobs versus home construction and currently facing inventory shortages are San Jose, Calif., at 22.6; San Francisco, Calif., 22.4; San Diego and New York, 13.9 each; and Miami, 11.1.
