The housing market is a balance of supply and demand. When there is more supply than demand, the inventory of homes for sale is plentiful, buyers have choices and negotiating power, and home-price increases are modest. When demand outpaces supply, the opposite is true. Home prices spike and buyers have to compete for available homes. That’s the primary reason for the current market’s affordability problem. There’s been a lack of supply for years and, according to one new analysis, it hasn’t improved. The National Association of Realtors’ consumer website just released its 2026 Housing Supply Gap Report and it found the market is still short 4.03 million homes. Danielle Hale, the website’s chief economist, says more new construction is needed. “Even when annual construction and household formation are roughly balanced, the market is still digging out from more than a decade of underbuilding,” Hale said. “A supply gap exceeding 4 million homes underscores how deeply rooted the shortage has become.” Hale suggests a targeted increase in supply in areas where it’s most needed is the solution to making homes more affordable for buyers. (source)
