New Report Contains More Bad News for Housing Affordability

(6/27/25)  A new report by the Joint Center for Housing Studies of Harvard University shows that the housing market is growing more uncertain – and less affordable.

The report, The State of the Nation’s Housing 2025, was released on June 24 and discusses how high home prices and interest rates have pushed home sales to their lowest level in 30 years.

Key takeaways from the new report include:

·      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.

·      Homeowners are increasingly burdened by rising household costs, due mainly to steep increases in insurance premiums and property taxes. Home insurance premiums jumped 57% from 2019 to 2024, and property taxes increased an average of 12% between 2021 and 2023.

·      Home prices have increased, but sales are down. As of early 2025, the Harvard report states that home prices were up 60% nationwide since 2019, hitting a median existing single-family home price of $412,500 in 2024. Existing-home sales dropped to a 30-year low.

·      To aid sales by keeping prices low, many builders are producing new homes that are smaller or have fewer amenities.

·      The homeownership rate in the United States fell in 2024 for the first time in eight years.

·      With fewer Americans being able to afford to buy a home, rental demand remains strong. But most apartments being constructed are at the upper end of the market, pricing out many would-be renters.

·      Tariffs, reduced immigration (which affects the labor pool for home construction) and diminished federal support create an uncertain outlook for the housing industry.

For more details, please read the entire Harvard report here.