Is the Housing Shortage Easing Up — or Are We Still Way Behind on Supply?

The idea of a “housing shortage” has dominated headlines for years. But in 2025, one key question for buyers, sellers and investors is: Are we finally closing the gap — or is the supply deficit still worsening? The short answer: yes, the shortage persists — in fact, in many places it’s still deepening — and we’re not yet “back to normal” in terms of supply.

Let’s dive into what the data says, what the implications are, and how this plays out in markets like Central Oregon (Bend / Redmond / Prineville).

What the data shows

National level

• According to a recent analysis from CBRE Investment Management, the U.S. now faces an estimated shortfall of 2 million homes or more, and fixing it will require adding 3–4 million units over the next decade.

• Others estimate the shortfall could be as high as 4.7 million homes nationwide.

• Permit and construction data show new housing units have failed to keep pace with job and household growth. For example, Oregon permitted only 14,621 units in 2024 — down 33% from its 2021 peak — illustrating how supply is still weak.

• One recent article pointed out that despite more talk about supply catching up, the number of sellers remains low and the inventory of homes for sale remains tight, which continues to support strong price pressure.

Central Oregon context

• In the Bend‑Redmond, OR HMA (housing market area), construction is modest: the HUD analysis shows new home permitting has been relatively flat (hovering around 1,200 units annually) even as demand and price growth have been strong.

• Local reporting in Central Oregon confirms: “High costs and low availability are hallmarks of the region’s housing shortage … even with more supply, it will probably be a long time until the gap is meaningfully reduced.”

• For Oregon overall, the state acknowledges a deficit of 128,000 affordable units for very low-income households — indicating the shortage is especially acute at low-income tiers.

Are things improving? Slightly — but with caveats

There are some positive signs:

• Builders and policymakers are increasingly aware of the shortage and are working on reforms and incentives to accelerate supply.

• Some regions are seeing more units planned and underway (especially multifamily rentals).

• The rate of shortage closing might be improving — but the absolute gap remains large.

However:

• Many new builds are still not meeting the types of homes in highest demand (starter homes, mid-price single-family, affordable units). cbreim.com

• Supply chain, labor, regulation, and cost pressures continue to slow down volume of new housing.

• In many regions (including Central Oregon) the shortage remains deeply embedded; simply saying supply is “catching up” would be premature.

What this means for buyers, sellers & investors in Central Oregon

For Buyers

• Expect competition, especially in the well-priced segments and popular neighborhoods. The shortage means supply is often constrained — though this gives you opportunity if you move quickly and strategically.

• Because supply is still limited, pricing may remain elevated and negotiating power may be tilted toward sellers in many sub-markets.

• Consider expanding your search area (e.g., outskirts of Bend, Redmond, or less dense nearby communities) where supply constraints may be slightly less acute.

For Sellers

• If you’re selling in today’s market, the supply shortage gives you an advantage — less inventory means your home may stand out more.

• But also: buyers are still sensitive to price, condition, value — so doing your homework, prepping the home well, and having strong comps still matters.

For Investors

• The persistent supply shortage can support long-term appreciation potential — especially for housing types in high demand (affordable, starter homes, rentals).

• However, be cautious: areas where supply is beginning to pick up might offer less upside in price growth — so location and demand will be key.

So, is the housing shortage easing up? Not really — at least not yet. The gap between what housing supply is and what’s needed remains large, and construction/permitting trends show the deficit is still growing in many areas.

For markets like Central Oregon, this means supply constraints are still very real. The good news? That scarcity can support the value of homes when you buy right and position smartly. The caution? Don’t assume you’ll have unlimited options — and prepare for longer-term investment rather than expecting rapid relief.

FAQs

Q: Is the housing shortage completely easing up?

A: No — while some improvement may be underway in select places, nationally and in many local markets the shortage remains deep and the supply gap is still increasing.

Q: Why doesn’t more construction fix the shortage faster?

A: A few key reasons: high costs of land & materials, labor shortages, regulatory & zoning constraints, and the fact that demand is very strong in many markets. These all slow down supply ramp-up.

Q: When might we “catch up” on supply?

A: It depends heavily on region, type of housing (single-family, multifamily, affordable units), and local policy. Some forecasts suggest a decade or more before supply is truly balanced.

Q: Does this shortage affect all price ranges equally?

A: Not always — the shortage is often most acute in affordable and starter home segments, where demand is greatest and supply hardest to build.