America’s 4.7 Million Home Deficit Finally Stopped Growing — But Seattle and Portland Are Still Among the Least Affordable Markets in the Country
New Zillow research shows the national housing shortage held nearly flat for the first time in years — good news nationally, but the Pacific Northwest still has a long way to go.
For the first time since the 2008 financial crisis triggered nearly two decades of chronic underbuilding, America’s housing deficit stopped growing in a meaningful way. According to new Zillow research released July 15, the national housing shortage held nearly flat in 2024 at 4.7 million units — growing by just 43,000 homes, down sharply from increases of 257,000 in 2022 and 159,000 in 2023. The primary driver of the improvement was a 50-year high in newly completed multifamily homes — a direct result of the construction boom that Pacific Northwest contractors have been actively participating in.
The good news ends there for most Oregon and Washington residents, however. The data contains two Pacific Northwest-specific numbers that tell the real story of where our region stands:
Seattle’s housing deficit: 97,380 units — the 15th largest in the country among major metro areas.
Portland’s housing deficit: 67,196 units — the 25th largest in the country.
Both cities are actually making measurable progress — Seattle’s deficit shrank by 4,543 units year-over-year and Portland’s by 3,289 — meaning both metros are building faster than new households are forming, which is exactly what needs to happen to close the gap over time. That’s a credit to the construction activity in both regions. But progress and affordability are two different things, and the affordability numbers reveal how far both cities remain from being accessible to ordinary working households.
Zillow measures affordability as the percentage of for-sale listings that a median-income household could purchase while spending no more than 30% of gross income on the monthly mortgage — the standard housing affordability benchmark — assuming a 20% down payment.
Nationally, 35.2% of listings were affordable to median-income households in May 2026 — up from 30.8% a year earlier, reflecting modest improvement.
Seattle: 16.2% of listings were affordable to median-income households — meaning more than 83% of homes for sale in the Seattle metro are out of reach for the typical family. That’s up from 13.7% a year ago, which is genuine improvement — but still less than half the national affordability rate.
Portland: 21.2% of listings were affordable — up from 16.4% a year ago, a more significant improvement. But still, nearly four out of five homes for sale in the Portland metro are unaffordable to the median-income household at current prices and rates.
For context, compare those numbers to Detroit at 55.9% affordable, Baltimore at 50.7%, or Cincinnati at 50.5% — markets where ordinary working families still have meaningful access to homeownership. The Pacific Northwest is operating in a different universe.
What’s Driving the Improvement — And What Could Reverse It
Zillow’s senior economist Orphe Divounguy described the national picture plainly: “The country is not yet building its way out of the hole, but we stopped digging.” The improvement in both Seattle and Portland’s deficit numbers reflects exactly this dynamic — more multifamily construction is helping, but the hole is deep enough that even sustained construction at elevated levels will take years to close it meaningfully.
The research is also clear about what separates the markets making faster progress from those still falling behind: building regulations. Builders responded faster to pandemic-era demand in areas with fewer building regulations, helping prices and rents ease in those metros and rebalancing those markets faster than in places with more stringent zoning.
This is precisely why both Oregon’s FastTrack Permitting Program and Washington’s permitting accountability legislation — which we’ve covered extensively in recent issues — matter so directly to the housing affordability picture. The data shows that where building is easier, affordability improves faster. Regulatory reform is not abstract policy. It is the mechanism by which the 4.7 million unit deficit gets closed.
What This Means for Pacific Northwest Contractors
The Zillow report is simultaneously sobering and encouraging for the construction industry in Oregon and Washington. Sobering because the scale of the deficit — 97,380 units in Seattle alone, 67,196 in Portland — represents an enormous gap between housing supply and household formation that will take sustained, high-volume construction to close. Encouraging because that gap is the construction industry’s mandate. Every unit built is a unit of progress against a deficit that has been documented, quantified, and — finally, after years of worsening — at least stabilized.
For contractors navigating the current environment of rising material costs, elevated mortgage rates, and softening single-family demand, the Zillow data provides the essential context: the need for housing in the Pacific Northwest is not going away. The pipeline of necessary construction — multifamily, affordable housing, ADUs, middle housing — is as large as it has ever been. The challenge is unlocking the financing, the permitting, and the regulatory environment to convert that need into actual units on the ground.
The markets that solve that challenge fastest will be the ones where contractors stay busiest through whatever the current rate cycle brings.
Data sourced from Zillow Research, July 15, 2026. Full report and metro-level data available at zillow.com/research.
