US Housing Shortage
The US housing market is experiencing a shortage of affordable homes, with a record low turnover rate and high median home price, presenting an opportunity for investors in building-products companies
Welcome to this week’s edition of Under the Radar.
One of the great advantages individual investors have over institutions is the ability to look where nobody else is paying attention.
Most of Wall Street is focused on artificial intelligence, quantum computing, cryptocurrencies, defense stocks, and whatever exciting story happens to dominate the financial news cycle this week.
The money managers on television spend their days arguing about the same handful of mega-cap stocks while an entire sector of the economy sits largely ignored.
That sector is housing.
More specifically, the companies that will eventually benefit from solving America’s housing affordability crisis.
The headlines make it sound as if housing is an impossible problem.
Politicians blame interest rates.
Economists blame inflation.
Industry groups blame regulations.
Buyers blame prices.
Sellers blame mortgage rates.
There is certainly some truth in all of those arguments.
However, the reality is much simpler than most people want to admit.
America does not have a mortgage problem.
America has a housing shortage problem.
The latest housing data confirms what many of us have suspected for quite some time.
The housing market is not broken because nobody wants to buy homes.
It is frozen because there are not enough affordable homes available for people to buy.
According to Redfin, only 28 out of every 1,000 homes changed hands during 2025, the lowest turnover rate in at least three decades.
Existing homeowners are staying put because they refinanced at historically low mortgage rates during 2020 and 2021.
Very few people want to trade a 3% mortgage for one closer to 6.5%.
The result is a classic supply squeeze.
People want homes.
People need homes.
People simply cannot find homes they can afford.
The median home price recently crossed $400,000 for the first time ever.
Monthly payments remain near record levels.
Meanwhile, the United States remains short more than 1 million homes by most estimates.
That shortage is the entire story.
The housing market is not suffering from a lack of demand.
It is suffering from a lack of supply.
The encouraging part of the story is that there is actually a solution.
Build more homes.
Not luxury apartments.
Not million-dollar custom houses.