It is OKAY.
Both my kids, were like that. As they got older, less so.
MANY kids are like that.
Let him be.
NOTHING is wrong with him.
My kids, are observers and very good, about knowing themselves. I am proud of them for that. Even if shy.
Do not try and make him what he is not.
He will grow out of it.
NOT all kids, have to be extroverts.
Know your child and his cues.
He is FINE.
As I said, my kids were like that. I do not call them "severely" shy. I call them "wise" about people and environments...and just developing, fine.
I might add: DO NOT convey to your child that something is 'wrong' with him, nor in front of others. It will make him insecure.
You want your child to be self-assured about themselves. Even if my kids were shy and (my son who is 4 is like that like your son), they are VERY self-assured kids. Because, we nurture them for who they are. Not what others may think.
They are very... not shy. Even if outwardly, they appear to be.
Don't get hung up, on what others may think.
Be proud of him.
MANY kids, are this way.
BUT... the fact that he is "shy" with you and your Husband... is concerning. Most kids, are not shy with their parents.
Is he scolded a lot?
all the best,
Susan