Springfield Faces Housing Shortage Amid Slow Construction

Springfield, September 25, 2025

News Summary

Springfield is struggling with a housing shortage as new construction slows and costs rise. With only 129 new residential permits issued recently, the city’s housing market is under increasing strain due to a growing population and declining household sizes. Economic experts suggest a national shortfall of 5 million housing units. Labor and material costs are soaring, further impacting affordability. Springfield’s development code is being updated to encourage diverse housing options, but significant measures are needed to address these challenges and improve the housing landscape in the city.

Springfield Faces Housing Shortage Amid Slow Construction and Rising Costs

Springfield, along with numerous cities across the U.S., is grappling with a significant housing shortage that is affecting residents and the overall economy. This pressing issue has been a central topic in various Planning & Zoning meetings and City Council discussions, as stakeholders seek solutions to a mounting crisis.

In 2024, Springfield issued only 129 permits for new residential builds, a number that mirrors pre-pandemic levels but pales in comparison to the figures seen before the Great Recession (2007-2009). Despite a steady population growth in Springfield over the last two decades, the construction of new homes simply isn’t keeping pace with demand.

Nationwide, the construction of new houses had already slowed after the subprime mortgage crisis, and recovery from that downturn has been long and arduous. On average, about 1.5 million new homes have been built annually in the U.S. over the past twenty years, yet that figure is insufficient given the rising population and shifting household needs. The trend of decreasing household sizes is amplifying the demand for more housing units, as more individuals are opting to live alone or delay starting families.

Scott Colbert, Chief Economist at Commerce Bank, pointed to a potential shortfall of 5 million housing units nationwide, illustrating the depth of the concern. In Springfield, the Home Builders Association of Greater Springfield noted a 13% drop in building permits for single-family homes as of July 2025. This decline is much sharper than the national rate of 6% and the 4% drop seen statewide.

While building permits for multi-family housing in Springfield have surged by over 30% year-to-date, the overall decline in housing permits highlights a worrying trend. Additionally, the construction industry is faltering due to a tightening workforce, as older contractors retire without enough younger individuals stepping into the trades. To address this issue, various educational programs and grants are being initiated to stimulate new entrants into the construction sector.

Cost factors are also a major player in the housing shortage. Labor and materials have remained expensive since the COVID-19 pandemic, and evolving economic uncertainties regarding tariffs have put further strain on construction costs. The result has pushed housing affordability to historic lows. In Springfield, the median new home price is about $417,500, leaving 84% of households unable to afford such prices.

To illustrate the impact of rising home prices, for each $1,000 increase in housing prices, an additional 161 households become priced out of the market. The low turnover rate of homes is also skewing the market, as residents tend to stay in their homes longer due to ultra-low mortgage rates. The typical home turnover has increased from every seven years to every fourteen years.

Although the Federal Reserve has announced interest rate cuts, significantly larger actions are deemed necessary for any positive shifts in the housing market. Furthermore, Springfield is facing a lack of available land for development, complicating efforts to meet housing demands. Many prospective buyers are ready to purchase but struggle to find suitable lots, especially as new developments are often pushed to the outskirts of city limits, facing regulatory hurdles and community resistance.

To address these challenges, Springfield is actively updating its development code to simplify processes and support diverse housing projects. However, this new code is still in the testing phase until 2026, casting doubt on its immediate effectiveness. Colbert indicated that tackling housing issues may ultimately require a boost in overall housing turnover and not just a reliance on new construction to meet community needs.

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Key Features of Springfield’s Housing Market

• 2024: Only 129 permits issued for new residential builds
• National average: 1.5 million new homes constructed annually
• Median new home price: Approximately $417,500
• 84% of households unable to afford the median price
• Low turnover rate of homes: Average increased from 7 to 14 years
• 13% drop in building permits for single-family homes in Springfield
• 30% increase in building permits for multi-family housing year-to-date
• Updated development code testing until 2026

Deeper Dive: News & Info About This Topic

Additional Resources

• News Leader: Springfield Housing Construction Remains Slow
• Springfield News Sun: Springfield’s Housing Market Hurdles
• MassLive: Springfield Developer to Begin Construction on Home Development
• Wikipedia: Housing Crisis
• Google Search: Springfield Housing Market

Author: Construction CA News

CALIFORNIA STAFF WRITER The CALIFORNIA STAFF WRITER represents the experienced team at constructioncanews.com, your go-to source for actionable local news and information in California and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Rose Parade, Coachella, Comic-Con, and the California State Fair. Our coverage extends to key organizations like the California Building Industry Association and Associated General Contractors of California, plus leading businesses in technology and entertainment that power the local economy such as Apple and Alphabet. As part of the broader network, including constructionnynews.com, constructiontxnews.com, and constructionflnews.com, we provide comprehensive, credible insights into the dynamic landscape across multiple states.