Harvard Joint Center for Housing Releases “The State of the Nation’s Housing 2025” Annual Report

On June 24^th, the Joint Center for Housing Studies (JCHS) released its annual report, “The State of the Nation’s Housing 2025.” The report contains five sections: housing markets, demographic drivers, homeownership, rental housing, and housing challenges. The primary takeaways are that 1) high housing costs continue to be a challenge for both homebuyers and current owners, 2) high rental costs continue to be a challenge as the recent surge in housing construction ends, and 3) the need for housing assistance has never been higher.

Housing Markets

The housing market remains increasingly expensive, with rising home prices and rents, and a recent slowdown in multifamily construction. As of early 2025, home prices are up 60% since 2019, while existing home sales have fallen to a 30-year low. These price increases are partly driven by persistent inventory shortages, with for-sale housing stock still well below pre-pandemic levels. Although single-family housing saw modest growth in 2024, it has done little to ease housing price increases. In the rental market, a surge in multifamily construction in recent years helped temper rent growth, but the recent slowdown in construction activity suggests future tightening. The report notes that new housing supply is crucial for increasing affordability in both the housing and rental market.

Demographic Drivers

Household growth has begun to slow due to a decrease in the number of households under age 45 and a sharp decline in immigration. While these declines have reduced overall growth, the number of householders aged 65 and over has risen 16% since 2019, with older adults now leading 28% of households. With native birthrates falling, immigration has become the main driver of population growth. From 2022 to 2024, immigration averaged 2.3 million people annually, compared to just 412,000 in average yearly resident population growth. Although immigration surged during this period, the report notes a sharp decline in early 2025. At the same time, natural population growth is expected to fall further and turn negative as the baby boomer generation ages and passes away, and births remain low.

The report also notes that households are shifting older with the number of householders age 80 and over doubling in the next two decades. Since older adults tend to live alone or with a spouse, this shift will increase the number of smaller households. Among younger adults, the number of householders aged 35-54 is projected to grow by 3 million by 2035, likely increasing the number of households with children. Additionally, householders of color are projected to account for over 95% of net household growth from 2025-2035 and all of the household growth from 2035-2045. By 2035, the share of households headed by a person of color is projected to grow to 40%.

Homeownership

The report finds that homeownership growth slowed significantly in 2024, marking the first decline in eight years. Racial disparities have also increased in the past year. For the first time in four years, the gap between white and Hispanic homeownership has widened, while the gap between white and Black homeownership remained unchanged.

Homeownership is becoming increasingly out of reach for low-income households as home prices and interest rates continue to rise. The median home price hit $412,500 in 2024 and first-time buyers now need an annual income of at least $126,700. Existing homeowners also face increased costs, with rising insurance premiums and property taxes. Low-income households have been hit the hardest by price increases, with nearly three-quarters of owners earning under $30,000 being cost burdened.

Rental Housing

Rental unaffordability continues to rise, with a record 22.6 million renter householders cost burdened in 2023. This number represents 50% of total renter households, including 27% who are severely cost burdened (i.e., householders who spend over half their income on rent).

Low-income households continue to bear the brunt of the affordability crisis, with 83% of those earning under $30,000 cost burdened in 2023. However, cost burdens have risen most dramatically for renters toward the middle of the income scale. Since 2001, the share of renters earning $45,000-$74,999 who are cost burdened has doubled to 45%. Even among higher-income renters, 13% of those earning $75,000 or more were cost burdened in 2023. Renters of color are also disproportionately affected by rising rental costs, reflecting ongoing impacts of discriminatory policies. As of 2023, 57% of Black renter households were cost burdened, along with 53% of Hispanic and 50% of multiracial renters.

Despite rising rental costs, renter household growth surged by 848,000 in 2024 and continued into early 2025. This raised the share of households that rent to almost 35%, nearing peak levels of the 2010s. The rental market is increasingly dominated by higher-cost units, with those priced over $1,400 more than doubling from 2013 to 2023. Meanwhile, affordable units are vanishing, as rentals under $600 dropped by 28% over the past decade and those renting between $600–$999 fell by 32%.

The report also notes that rental construction surged in 2024, but most new units are priced beyond reach for lower-income households. Median asking rent for new apartments reached $1,900, affordable only to those earning $76,000 or more. At the same time, rising costs, including insurance premiums, repairs, and property taxes, are straining property owners.

Housing Challenges

Low-income renters face severe affordability challenges, yet rental assistance remains limited. As of 2021, only 5.1 million of 19.3 million eligible renter households received aid, leaving three-quarters, or 14.2 million households, without support. Among these households, 8.5 million were severely cost-burdened or lived in substandard housing. Despite growing need, federal housing assistance has not kept pace. The report notes that budget shortfalls may lead to the loss of 32,000 Housing Choice Vouchers, while public housing suffers from a $90 billion maintenance backlog, with 10,000 units lost annually. The Low-Income Housing Tax Credit (LIHTC) has created 3.8 million units since 1986, but 6,000-10,000 units are lost each year due to a loophole that allows property owners to exit after the initial 15-year compliance period. In rural areas, USDA Section 515 units are steadily disappearing and could vanish entirely by 2050 without intervention.

Additionally, homelessness has reached record highs, with 771,480 people unhoused in January 2024, an 18% increase in just one year and 33% increase since 2020. Unsheltered homelessness also rose to 274,220, the highest on record. Despite these staggering numbers, key federal programs aimed to address homelessness, like HUD-Veterans Affairs Supportive Housing (HUD-VASH) and the Continuum of Care program, face delayed or uncertain funding. Furthermore, in the wake of a 2024 Supreme Court ruling allowing penalties for unsheltered homelessness, over 150 cities across the country have enacted encampment bans. The report warns that such policies, without expanded shelter or housing options, worsen outcomes for unhoused individuals without addressing root causes.

The report also notes that with federal housing supports at risk, states and cities are stepping up. Over 800 housing trust funds and 350 rental assistance programs are active nationwide, and voters approved $640 million in housing bonds in 2024. Cities are also using corporate taxes and public bonds to fund new housing. To boost supply, jurisdictions are easing zoning rules to allow more multifamily and “missing middle” housing types like accessory dwelling units (ADUs). Despite these innovations, the authors warn that declining federal support could undermine state and local efforts to address the affordability crisis, as their funding capacity is limited compared to HUD resources.

In total, the country faces a shortfall of over 1 million housing units, worsened by natural disasters that destroyed more than 20,000 homes in 2024. Federal disaster assistance like Community Development Block Grant Disaster Recovery (CDBG-DR) funds and FEMA programs are critical, but proposed federal cuts could shift the burden to state and local governments. Rising natural disaster risk has driven homeowners’ insurance premiums up 62% since 2018, leaving more households uninsured or reliant on underfunded state plans. Combined with rising property taxes and repair costs, these trends are straining low-income and older homeowners. In response, some states have launched tax relief and repair assistance programs targeting those most at risk.

Conclusion

The current housing market is shrouded in uncertainty. The report notes that states and local governments will play a larger role in addressing housing needs as the federal government pulls back supports. However, the assistance provided by the federal government is nearly unmatched, and it will be difficult for localities alone to replace vital housing assistance. The private sector must also play a role in delivering more affordable housing options in an increasingly expensive market. The state of the nation’s housing is in distress, and the report underscores the urgency in addressing these pressing challenges now with proven solutions.

The full report can be found here.