The United States is more than 1.2 million homes short of meeting demand, with the National Association of Home Builders warning that the world’s largest housing market by retail value is facing a structural shortage in house supply, which could take decades to unwind. That is according to new data published by NAHB’s Eye on Housing, which suggests the gap could close between 2026 and 2030, contingent on sustained homebuilding activity.
And the squeeze is most acute in single‑family construction, which leans on timber systems for 93 per cent of new homes, where a combination of restrictive zoning, limited land availability and labour shortages has created bottlenecks and pushed vacancy rates to levels not seen in decades.
In the country’s tightest markets, the lack of available housing has led cities to operate with vacancy rates so low that even modest population growth puts immediate pressure on supply. Several California metropolitan areas, for example, including San Jose, Santa Barbara, Santa Cruz, and Los Angeles, have spent most of the past 20 years with vacancy rates below 4 per cent. Whilst in Chicago, officials say they need 40,000 more units to meet parity, with an additional 20,000 dwellings also needed in New York City and Philadelphia.
Can the “smarter use” of industrialised wood short-circuit the crisis?
Last month, Gary Fleisher, a U.S. based modular housing expert, said that prefab could help close the gap if builders were prepared to increase their share of factory‑built homes from less than 3 per cent to 15-25 per cent. To do this, Fleisher said, the value chain would need to accept that housing (and wood) is an industrial product. “That would be transformational,” he said. “Not Swedish‑level (which is more than 85 per cent), but meaningful, profitable, and scalable.”
“If you want to understand Sweden’s success, follow the trees,” Fleisher said, stressing that the Swedes invested heavily in engineered wood systems and precision manufacturing decades before most U.S. builders had even heard the term “panelization.”
“Small single-family homes (can’t) be treated as custom projects,” he said. “They must be treated as products with options, much closer to manufactured housing thinking than American stick-built tradition—except executed at a much higher architectural and energy-performance level.”
“This matters because factories thrive on repeatability, not heroics.”
- To learn more about the push to embrace ‘industrialised’ home building, click here for Gary Fleisher’s article on Sweden’s modular housing industry.
