Housing Shortage Tracker: Stabilization at the End of 2025

NAR’s quarterly Housing Shortage Tracker Index is a forward-looking indicator that measures the number of new building permits issued per new job created in selected major metropolitan areas. The index helps identify areas with the largest deficit of single-family homes and provides insight into what affordability might look like in those areas in the coming months. A high index indicates that more jobs are being created than homes in a specific area, while a negative ratio shows that there were no job losses in that area.

Based on historical trends, a balanced market issues one single-family building permit for every two new jobs. Therefore, an index value of two or below signals balanced housing conditions.

Insights from Q4 2025:

In December 2025, nearly 93% of the major markets tracked in NAR's index had narrowed the housing supply-demand gap by issuing more single-family building permits. Moreover, by the end of the year, about 63% of the areas had a housing shortage index of two or lower. This is a noteworthy improvement compared to the same time in 2024, when less than 50% of the areas were near a balanced index.

Despite nationwide improvement, permit activity in some markets was insufficient to keep up with job growth. The most constrained markets remained largely unchanged from earlier quarters in 2025, with Urban Honolulu, HI; New Haven-Milford, CT; and New York-Newark-Jersey City, NY-NJ-PA, leading as the top three, although index values generally moved closer to a balance. Among the top 15 markets with the highest shortages, Rochester, MN, was the only area to see an increase in its index between December 2024 and December 2025.