This is just one reason why I never liked playing in the heavily populated EA worlds as they always ran out of housing too fast and this issue is much worse when you play Mod-free as the EA bugfest will try to overload the town with way too big of a population.I've had Sunset Valley get up to over 1000 resident sims moved in by the EA bugfest and it meant no way my housheold could move.
I solved this by starting with new games in empty unpopulated worlds and slowly adding my own populations into the towns with a heavly Modded game folder and settings tuned for TS2 style story progression which allows me to manage the town and manage their housing needs manually.