👋👋 Good morning real estate watchers! Today, we are going to talk about...

1. America is short 15 million homes—which explains why your cousin Chad is still living in your aunt’s basement, contributing nothing but microwave burrito fumes and political opinions no one asked for.

2. Witness an MLS turf war as CRMLS tells NAR, “Thanks, but we’ll ruin consumer trust in our own way.” It’s like watching two bureaucratic uncles argue about remote settings while the listing data quietly sets itself on fire.

3. Warehouses are suddenly feeling feelings. Prologis made billions this quarter but decided to “pump the brakes,” proving that even the most industrial spaces are now just anxious millennials with 95% occupancy and a looming fear of recession.

Let’s go!

TOP STORY

15M HOME HOLE

In a modest two-bedroom apartment in Phoenix, 34-year-old Maria Lopez is paying $2,200 monthly rent, up nearly 40% from just four years ago. She’s a nurse, a single mother of two, and has been saving for a home for over a decade. But as home prices soar and the number of available listings dwindles, the American dream feels more like a punchline. “It’s not that I don’t want to buy,” she says. “There’s just nothing I can afford.”

At this point, Lopez's only chance of getting a house is if her crypto NFT of a house appreciates enough to buy the real one.

Lopez’s story is far from unique. It’s emblematic of a deeper, structural issue in America’s housing market that can no longer be chalked up to high interest rates or pandemic-era anomalies. The U.S. is facing a full-blown housing shortage, and new research suggests we’ve been underestimating just how bad it is.

How Deep Is the Hole?

According to economist Kevin Erdmann, the real shortage isn’t the oft-cited 3 to 5 million homes—it’s closer to 15 to 20 million.

Erdmann, whose deep dive into headship rates and real rent inflation reads like a housing market autopsy, argues that “the decline in real housing was expressed through fewer units,” and that to reverse course, America would need the equivalent of 40 million homes in construction and improvements.

And it’s not just Erdmann. In a study published by the IZA Institute of Labor Economics, economists Kevin Corinth and Hugo Dante use demand elasticity to estimate that the U.S. is 20 million homes short. Their premise is simple: where there’s a shortage, prices contain a “bribe to the land.” If supply increases, that bribe disappears, and prices normalize.

The signs of scarcity are all around us. Despite a 17% increase in population since 2003, the U.S. still has the same number of vacant housing units—roughly 15 million. Meanwhile, household sizes have reversed a decades-long decline. From 1965 to 2008, adults per household dropped from 1.87 to 1.64. That number has since surged to 1.76. It’s not because Americans suddenly love roommates again—it’s because they have no choice.

Policy: Making It Worse, Not Better

Lawmakers keep responding with rent control and landlord taxes—as if solving a national housing shortage is just a matter of scolding people harder. That’s like trying to fix a famine by yelling at the grocery store.

Over the past decade, governments worldwide have tried to rein in housing costs by targeting landlords and limiting rent increases. Spain, for instance, has implemented strict caps on rent increases, especially for large landlords. The result? A 75% drop in available rental listings in Barcelona since 2019, and 63 families competing for every listing.

In Ireland, where the population has grown by 9% since 2016, registered tenancies are down 23%. And in the U.S., markets like New York and California continue to flirt with stricter rent controls while simultaneously failing to address building constraints. As The Economist put it bluntly: “Foolish crusades against landlords have made housing shortages worse.”

The Economics of Inertia

The problem isn’t just local—it’s national. Before 2008, high rents in places like Los Angeles reflected local shortages. Families priced out of L.A. could move to Phoenix, where housing was cheaper and more abundant. Now? That same family finds Phoenix just as unaffordable.

Zillow estimates that 4.5 million individuals or families wanted homes but could not find them. The result? A historic mismatch between supply and demand, with home prices skyrocketing and would-be buyers sidelined.

“We are far away from a balanced market,” said Nadia Evangelou, senior economist at the National Association of Realtors (NAR). Despite a construction bump during the pandemic, the median home price in February 2025 was still $414,500. Only 21% of listings were affordable to households earning $75,000—a stark drop from 49% pre-pandemic.

Building Our Way Out

To be clear: building is the only real solution. But even that’s easier said than done. Tariffs on key building materials, NIMBY resistance, and outdated zoning laws continue to gum up the works. In February, housing starts reached an annualized rate of 1.5 million homes—a decent pace, but not nearly enough.

And much of that building is happening in just a few regions. While starts rose 20.2% in the West over the past year, they dropped 21.5% in the Midwest and 8.3% in the South, according to the Census Bureau. Meanwhile, Buddy Hughes of the National Association of Home Builders warned of “elevated financing and construction costs” and forecast a flat trajectory for the rest of the year.

The Path Forward: Yes in My Backyard

To solve the housing crisis, America must embrace a radical shift: fewer restrictions, more construction, and a focus on quantity and quality. That means welcoming luxury condos and affordable units. As Erdmann notes, “An affordable Los Angeles will include rich families living in better homes and poor families spending less. Both parts of that pair would be the result of a normalized L.A.”

In other words, if your solution starts with “Only build…” you’re already part of the problem.

Housing isn’t just a policy issue. It’s a supply issue, a mobility issue, and—above all—a math problem. And until we stop treating housing scarcity as a boutique concern of coastal elites, Maria Lopez and millions like her will be stuck paying too much for too little.

The bottom line? Housing doesn’t need a Band-Aid. It needs a bulldozer.

SNIPPETS

1️⃣ Housing Hangover: The median home sale price reached $431,057, growing at the slowest pace (2.5%) in 18 months, while homes are taking longer to sell, averaging 47 days on market—the longest since 2019. Supply has hit a five-year high, with active listings increasing 14.1% year-over-year, creating more options for buyers and reducing seller negotiating power. Only 27% of homes sold above list price, the lowest March percentage since 2020, signaling a shift from the pandemic-era frenzy. While some metropolitan markets like Cleveland and Nassau County saw strong price appreciation, others like Jacksonville and San Francisco experienced declines. Notably, elevated mortgage rates (6.65%) continue to temper demand, making it crucial for investors to carefully analyze local market conditions, price strategically, and be prepared for a more measured, competitive environment compared to the explosive years of 2021-2022. (Redfin)

2️⃣ MLS Mic Drop: The California Regional MLS (CRMLS), representing 108,000 subscribers, refuses to adopt the National Association of Realtors' new Multiple Listing Options for Sellers (MLOS) policy. Instead of creating a new listing status, CRMLS argues its existing "Active" status already meets most policy requirements and maintains marketplace transparency. The MLS is concerned the new policy could create compliance confusion, redundant listing statuses, and potentially limit consumer access to property listings. CRMLS CEO Art Carter is particularly vocal about preventing "private listing networks" that could disadvantage unrepresented buyers, citing potential legal risks from consumer advocacy groups and the Department of Justice. The stance highlights ongoing tensions between large brokerages (like Compass) seeking more listing control and MLS platforms committed to open market access, with the September 30th implementation deadline approaching. (Inman)

3️⃣ Warehouses Wavering: Prologis' Q1 report reveals a nuanced industrial market landscape: despite strong earnings of $2.1B and core funds from operations increasing 9.2%, economic uncertainty is tempering growth expectations. The company's 1.3B SF portfolio maintains a solid 95% occupancy rate, with 65M SF of industrial space leased in Q1, though leasing activity has slowed by about 20% due to trade war uncertainties. E-commerce remains a robust sector, accounting for 20% of leasing activity, with Amazon re-entering the market. Prologis is strategically adjusting its development plans, reducing expected development starts from $2.8B to $2B and maintaining a cautious approach amid potential recessionary signals. Notably, net effective rent growth of 53.7% year-over-year is decelerating, reflecting shifting market dynamics and tenants' desire for flexibility. (Bisnow)

4️⃣ Economic Oof: Consumer sentiment has plummeted to near-historic lows, with the University of Michigan's index hitting 50.8 in April - the second-lowest reading since 1952. Consumers anticipate a 6.7% price increase over the next year, the highest expectation since 1981, while experiencing eroding confidence in the labor market. Unemployment expectations have more than doubled since November, reaching 2009 levels. Financial stress indicators are emerging, with record-high credit card minimum payments and delinquencies. While current economic data hasn't fully reflected this pessimism, the underlying sentiment suggests potential cooling in spending and investment markets. (Sherwood)

5️⃣ Listing Landmine: Zillow has drawn a line in the sand by announcing it will ban listings that aren't simultaneously shared across all platforms, directly challenging brokerages like Compass that have been practicing "exclusive inventory" marketing. This move comes amid a slow sales market and increasing pressure on agent commissions, with major players like CoStar's Homes.com and Redfin supporting increased transparency. The implications are significant: sellers might face limited exposure, buyers could need to search multiple websites, and there's potential for government intervention if market confusion continues. While the immediate impact remains uncertain, the standoff highlights growing tensions in how real estate listings are marketed and accessed, potentially signaling a fundamental shift in how homes are advertised and discovered online. (BI)