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Affordability challenges and rising economic uncertainty continue to impact housing conditions, while slowed household growth and cost burdens for both renters and homeowners also contribute, according to the annual State of the Nation’s Housing report from the Harvard Joint Center for Housing Studies (JCHS).
The new report shows that household growth, a key driver of housing demand, slowed for the third consecutive year in 2025, falling from an average 2.0 million households in 2021 to 1.1 million in 2025, reflective of reduced household formation among young adults amid weak labor markets, student debt and increasing economic challenges.
“Many young adults simply cannot afford to form their own households and are instead doubling up or living with family,” says Daniel McCue, senior research associate at the Joint Center for Housing Studies. “For others, deep uncertainty about their financial futures and about the broader economy are causing them to delay major life decisions. This pullback is a clear sign of economic stress that reverberates through housing markets.”
New housing construction also softened in 2025, with single-family starts falling 7% as high homebuying costs lowered housing demand and unsold inventories increased, prompting builders to cut prices and shift to smaller homes and lots. Housing affordability for low and moderate income households continues to be out of reach. In 2024, 11.0 million extremely low-income renter households were competing for just 3.8 million affordable and available units.
“The existing stock of low-rent housing is shrinking rapidly, and private markets are incapable of producing enough deeply affordable units,” says Alexander Hermann, senior research associate at the Center. “The number of units renting for under $1,000 a month in real terms fell by more than 7 million between 2014 and 2024, while higher-rent units surged. Without significant new subsidies and stronger protections for at-risk properties, we risk losing even more of the limited affordable stock that remains.”
Renters and homebuyers are also facing significant cost burdens, with 49% of renter households spending over 30% of their income on housing as of 2024. For homeowners, property taxes rose 31 percent between 2019 and 2025, while average monthly insurance premiums jumped 72 percent, as extreme weather and climate change inflict greater damage to the nation’s housing supply and put tens of millions of homes at significant risk.
Read the full report here.
