The U.S. housing market has grappled with housing affordability, primarily due to low inventory. A limited workforce, insufficient building permits, or zoning restrictions are also factors hindering housing affordability for homebuyers. Interestingly, although the San Francisco-Oakland-Fremont and the San Jose-Sunnyvale-Santa Clara metropolitan areas have struggled with these problems, according to the National Association of Realtors Housing Shortage Tracker, these metros are not the top areas with the greatest housing shortages.
NAR's quarterly Housing Shortage Tracker index calculates the number of new building permits issued for every new job created in selected major metropolitan areas across the country. A high index indicates that more jobs are being created than homes in a specific area. Historically, one single-family residence permit is issued for every two new jobs.
According to the Housing Shortage Tracker index, in the fourth quarter of 2024, the San Francisco-Oakland-Fremont metropolitan area, which the index identifies as having a "housing shortage" issued one single-family residence permit in every five new jobs. In the San Jose-Sunnyvale-Santa Clara metropolitan area, identified as an area that "needs more permits," issued one single permit in every four new jobs.
In an article about the Housing Shortage Tracker index, Anat Nusinovich, an economist for the National Association of Realtors, noted the Urban Honolulu, HI area topped the list of the 10 metropolitan areas with the greatest housing shortage in fourth-quarter 2024, issuing one permit per 18 new jobs. The New York-Newark-Jersey City, NY-NJ-PA area, came in second issuing one permit per 16 new jobs, followed by Miami-Fort Lauderdale-West Palm Beach, FL, and New Haven, CT, both 14 new jobs. Other metros on the top 10 list include Hartford-W Hartford-E Hartford, CT, Champagne-Urbana, IL, Syracuse, NY, all issuing one permit per 11 new jobs; Anchorage, AK, 10 new jobs, and Bridgeport-Stamford-Norwalk, CT and Buffalo-Cheektowaga-Niagara Falls, NY, with one permit per nine new jobs.
All but one of the top areas on severe housing shortage list showed improvement year-over-year. Anchorage, AK was a new area included in the top 10 list in Q4 2024, issuing one permit per 10 jobs in December 2024, compared with one permit per eight new jobs in December 2023. Additionally, Nusinovich indicated that although the housing supply overall had improved by the end of 2024, 121 of the major metropolitan areas were still experiencing a housing shortage with an index greater than the national historical average of two.
"It's good to learn the Tracker index doesn't list the San Jose-Sunnyvale-Santa Clara metro on the list of areas with the most severe housing shortages, but housing shortage and affordability in our housing market cannot be ignored," said Tammie Peters, president of the Silicon Valley Association of Realtors. "The Tracker index shows that we have a need for more permits and that's because strict zoning regulations restricting new construction further exacerbate the supply-demand gap. Realtors continue to advocate for strengthening housing laws and eliminating unnecessary barriers that local governments place on housing developments."
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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