US Housing Supply Could Outpace Demand by 2035 as MBA Warns of Oversupply
Updated
Updated · Newsweek · Jun 30
US Housing Supply Could Outpace Demand by 2035 as MBA Warns of Oversupply
3 articles · Updated · Newsweek · Jun 30
Summary
MBA researchers said the U.S. housing market could swing from a shortage of 1.5 million to 7.3 million homes today to potential oversupply by 2035 if building stays high and demand weakens.
Aging, low fertility, smaller younger cohorts and reduced immigration are expected to slow household formation, while rising vacancies, stalled rent growth and bigger for-sale inventories already point to softer demand in Sun Belt markets.
Florida and Texas, which ramped up construction after pandemic-era population inflows, have already seen significant price adjustments, while shortages remain more acute in parts of the Northeast and Midwest.
Lower prices could help buyers, but the study warns a surplus would erode homeowner equity and pressure mortgage origination, credit performance and lending standards—especially for self-employed borrowers and investors.
Researchers and outside experts said even if overall supply improves, it may not fix the affordability crisis because the biggest shortage remains in lower-cost homes that many middle- and lower-income households can afford.
If a housing surplus is coming, why might homes remain unaffordable for the average American?
Will America's housing future be a tale of two markets: surplus in the South, scarcity in the North?
2026 U.S. Housing Market Outlook: Regional Divergence, Demographic Shifts, and the End of the Shortage Era
Overview
The U.S. housing market is sending mixed signals, with some regions gaining momentum while others face challenges. Recent data shows existing-home sales rising, driven by improved affordability as mortgage rates stay low and incomes grow faster than home prices. However, new home construction is uneven, with only the Midwest seeing growth and other regions declining. This complex environment is further shaped by demographic shifts, policy changes, and varying construction costs, leading to regional differences in supply and demand. As a result, the market is moving toward a more balanced state, but with significant local variations.