Amid a nationwide shortage of 4.5 million homes, builders are going all out to supply the single-family residences consumers want. But there's a catch: affordability.

So even though almost one million single-family homes were completed in 2023 – the second-highest total since before the global financial crisis of 2007-2008 – the pace of construction is slowing this year as would-be buyers feel priced out of the market. Though 946,000 single-family homes were started in 2023, that was 7% fewer than in 2022 — but it was 6% higher than in 2019, according to a new Zillow report.

The result is that builders are finding other ways to satisfy the market while containing costs. "The best long-term solution is more supply. Builders are helping where they can by shifting to more cost-conscious and space-efficient designs. But promoting density through local laws is key — that will go a long way to bring in more affordable homes where they're needed the most," said Orphe Divounguy, Zillow senior economist.