The US housing market is carrying a growing backlog of potential homebuyers, with nearly two million households that economists say would normally have formed but did not in 2025. The delayed household formation reflects the growing difficulty younger Americans face entering the housing market and highlights the scale of housing demand that has yet to materialise.<\/p>\n
According to a recent report by Realtor.com, the US housing supply gap widened to 4.03 million homes last year. While builders started 1.36 million housing units in 2025, the creation of around 1.4 million new households meant construction activity continued to fall short of underlying demand.<\/p>\n
The calculation also includes so-called \u201cmissing households\u201d \u2014 individuals who historically would have established their own homes but instead remained living with parents, extended family members or roommates.<\/p>\n
Researchers estimate that 1.82 million potential households among millennials and Gen Z did not form in 2025, largely due to high home prices, elevated mortgage rates and limited availability of entry-level housing.<\/p>\n
Affordability pressures delay household formation<\/strong><\/p>\n The main factor behind the missing households is affordability. Over the past decade, housing costs have risen faster than incomes, particularly in the entry-level segment of the market.<\/p>\n In 2025, the minimum recommended income required to purchase a median-priced starter home reached about $86,000, exceeding the earnings of many workers in their twenties and early thirties.<\/p>\n Saving for a down payment has also become more difficult. The average down payment reached 14.4%, with the median amount around $30,400. At current savings rates, housing analysts estimate it would take a typical household around seven years to accumulate the funds needed for a down payment.<\/p>\n As a result, a growing share of younger Americans are delaying independent living arrangements. The share of 18- to 44-year-olds living with their parents remains noticeably higher than it was a decade ago.<\/p>\n Entry-level housing shortage<\/strong><\/p>\n The shortage is particularly severe in the entry-level housing segment, where supply has failed to match the purchasing power of first-time buyers.<\/p>\n Much of the new construction in recent years has focused on higher-priced homes, leaving relatively few affordable options for younger households. When fewer first-time buyers enter the market, existing homeowners are less likely to sell their properties and move up the housing ladder, keeping overall inventory tight.<\/p>\n This dynamic has contributed to the median age of first-time homebuyers rising to 40 in 2025, the highest level on record.<\/p>\n Construction demand and wood consumption<\/strong><\/p>\n For the wood products sector, the missing households represent a significant amount of construction that has yet to take place.<\/p>\n Residential construction remains the largest single driver of lumber consumption in the United States. A typical single-family home uses around 15,000 board feet of lumber for framing alone, while multifamily housing requires smaller but still substantial volumes of wood products.<\/p>\n Taking into account the typical mix of single-family and multifamily construction in the United States, building two million homes would require roughly 25 billion board feet of wood products, equivalent to about 60 million cubic metres of timber.<\/p>\n Beyond structural lumber, homebuilding also generates large demand for engineered wood products, including plywood, oriented strand board (OSB), laminated veneer lumber (LVL), I-joists and other structural panels used in floors, walls and roofs.<\/p>\n These materials are central to modern North American construction, where wood-frame housing dominates residential building. Structural panels such as plywood and OSB are widely used for wall sheathing, roof decking and subfloors, while engineered wood beams and joists are commonly used in floor systems and roof structures.<\/p>\n As a result, any increase in housing construction tends to lift demand across the entire wood products chain, from sawmills producing structural lumber to panel producers manufacturing plywood and OSB.<\/p>\n A backlog of housing demand<\/strong><\/p>\n The nearly two million missing households therefore represent a substantial amount of housing demand that has been postponed rather than eliminated.<\/p>\n If mortgage rates ease or housing supply increases, many of the young households currently waiting on the sidelines could begin forming in a relatively short period. That shift would likely lead to a rise in housing starts as builders attempt to close the supply gap.<\/p>\n Given the strong link between homebuilding and wood consumption, such a development would translate directly into higher demand for lumber, plywood, OSB and other engineered wood products used in residential construction.<\/p>","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":98215,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[5204],"tags":[],"class_list":["post-98214","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news"],"acf":[],"yoast_head":"\n