A new report from the Council of Economic Advisers estimates that the United States is short at least 10 million single-family homes, significantly higher than prior industry projections and underscoring what officials describe as a long-term structural imbalance in housing supply.

The analysis reframes the housing shortage not as a shortfall driven solely by current demand pressures, but as the cumulative result of underbuilding that began after the 2008 financial crisis. Rather than comparing housing supply to population growth, the report uses a counterfactual benchmark: it projects how many homes would exist today if construction had continued at pre-2008 levels.

Under that approach, economists argue the country did not merely lag behind demand in recent years, but experienced a prolonged collapse in homebuilding that never fully recovered. Previous estimates from industry groups such as Freddie Mac and the National Association of Realtors placed the gap closer to 3.7 million to 5.5 million units, figures that primarily reflect near-term demand conditions rather than lost production over time.

The report attributes the persistent gap to a combination of factors, including tighter credit conditions after the financial crisis, rising construction costs, labor shortages in the building sector, zoning restrictions, and investor caution following the housing market collapse. It notes that single-family construction activity has remained below historical norms for much of the past two decades.

Policy responses under consideration include measures to expand housing credit access, streamline regulatory approvals, and reduce development delays tied to environmental review processes. Some proposals in Congress also target institutional investors in the housing market, reflecting growing political attention to affordability concerns ahead of upcoming election cycles.

At the same time, elevated mortgage rates continue to weigh on both buyers and developers, with 30-year fixed rates hovering above 6 percent. That environment has constrained construction activity and reduced purchasing power, complicating efforts to close the supply gap.

The report concludes that the housing shortage reflects broader structural constraints in the U.S. economy, arguing that prolonged underproduction has contributed to reduced affordability, weaker labor mobility, and widening regional disparities in housing access.