Building more is necessary if the available housing is not located where appropriate employment is located. Thus, the gross number of available homes isn't a good metric to use for determining the actual need for new construction.

If enough more houses are built that prices stop increasing faster than inflation, housing will no longer be valuable as a speculative asset. Building more houses BOTH makes housing immediately available, and changes the market forces in a way that pushes out investors squatting on un-lived-in units.