Each summer, Harvard Joint Center for Housing Studies (JCHS) releases their annual State of the Nation’s Housing report. The findings are mostly common sense: housing cost burdens continue to climb for renters and homeowners, there is a severe lack of available and affordable units for low-income families, and federal housing assistance is underfunded. It isn’t anything new or unexpected, but the report is valuable and significant because 1) it backs these trends with data; 2) it serves as a barometer for how effective current housing policies and practices are; and 3) it calls for changes to status quo housing policies fostering growing inequity.
Drivers of Housing Demand Are Weakening
Household growth continued to slow for the third consecutive year in 2025. This is largely because:
- Young adults cannot afford to move out on their own and are instead opting to continue living with their parents or double up with friends and roommates. The new report shows that household growth, a key driver of housing demand, fell from an average of 2.0 million households in 2021 to just 1.1 million in 2025.
- Homeowners locked in at low interest rates are opting to stay put. The report documents a record-low residential mobility rate of 11.2 percent in 2024, driven primarily by declining moves among homeowners with below-market mortgage rates.
The Number of Units Available and Affordable to Low-Income Renters Continues to Shrink
Yes, vacancies are rising, but these vacancies are in newer units unaffordable to low- and moderate-income families. As aging affordable properties go offline, the units replacing them are unaffordable even to middle-income renters.
Echoing data from the National Low Income Housing Coalition’s annual The Gap report, Harvard JCHS researchers found that as of 2024, 11.0 million extremely low-income renter households were competing for just 3.8 million affordable and available units. Without subsidies and stronger preservation of affordable rental properties, the mismatch between available units and units affordable to low-income households will only continue growing.
Housing Cost Burden Is at a Record High for Renters and Is Growing for Homeowners
- Rents are stabilizing and even falling in certain areas, but more renters are cost burdened than ever before. The report finds that 22.7 million renter households (49 percent) spent more than 30 percent of their income on housing, including 12.1 million (26 percent) with severe burdens, paying more than half of their income for housing. The number of cost-burdened renters has grown by 2.3 million since 2019, with the worst burdens among lower-income households and renters of color.
- Rising property taxes and insurance premiums are resulting in homeowners spending near record portions of their income on non-mortgage housing costs. Non-mortgage costs balloon: property taxes rose 31 percent between 2019 and 2025, while average monthly insurance premiums jumped 72 percent.
- Homeownership continues to fall with the mismatch of home prices and incomes. Home prices have increased 54 percent nationwide since 2020, and in 2025 the median existing single-family sales price was nearly five times the median household income. Incomes are not keeping up with home prices and interest rates have remained high.
Federal Housing Assistance Is Severely Underfunded, Which Puts Pressure on States and Localities to Fill the Gaps
Federal housing assistance does not begin to meet the rising need. As a result, states and localities are increasingly turning to tools like zoning to increase supply and anti-displacement policies to stabilize communities. LIHTC units are aging out of mandated affordability more quickly than they can be replaced. The Federal Housing Choice Voucher program remains underfunded and risks being unable to cover existing voucher renewals. Ultimately, state and local efforts are unable to meet the growing scale of the need. Chris Herbert, managing director of the JCHS, notes, “Only the federal government has the scale and staying power necessary to close the gap between what our housing system produces and what our lowest-income households can afford. Without a more robust national response, we risk deepening inequities and entrenching housing instability for millions.”
