JCHS Finds a Worsening Affordability Crisis

(Illustration: JCHS)

The U.S. housing market remains shrouded in uncertainty, with little indication that high home and rent prices will ease anytime soon, a new report from the Harvard Joint Center for Housing Studies finds.

High home prices and interest rates have pushed sales to their lowest level in 30 years, according to The State of the Nation’s Housing 2025. Renter cost burdens also reached a record in 2023, the latest year studied.

“Amid concerns about diminished federal supports, state and local governments are ramping up efforts to tackle the affordable housing crisis, but the increasing possibility of an economic downturn threatens to deepen these challenges,” the JCHS said.

Some Takeaways from The State of The Nation’s Housing 2025

• Renter Cost Burdens Hit Another Record High

For the third consecutive year, in 2023, the number of cost-burdened renters (those spending more than 30% of their income on housing and utilities) reached a record high at 22.6 million renters (50%).

While households with lower incomes constitute the bulk of burdened renters, the strain is creeping up the income ladder: burden rates were over 70% for renters earning $30,000 to $44,999 and rates doubled to more than 45% for renters earning $45,000 to $74,999.

• Rental Demand Remains Strong, but Construction Largely at High End of the Market

As fewer households have been able to become homeowners, the renter population has grown, jumping by 848,000 in 2024. This demand is absorbing the wave of new multifamily rental units: in 2024, multifamily developers completed 608,000 new units, the most in nearly four decades. However, much of this construction was at the upper end of the market; the number of higher-rent units has increased dramatically while the number of lower-rent units has fallen substantially.