Housing is in crisis, and it has been for the past few years. While the term “housing crisis” itself sparks some debate, the data does not lie. Experts across the industry have been saying that the housing market is facing unprecedented challenges, and organizations like Harvard University’s Joint Center for Housing Studies (JCHS) have been tracking this in order to help the industry face it head-on.
JCHS shared countless insights into the crises the housing market is facing and how they have evolved at its 2025 State of the Nation’s Housing event, held at the Boston Federal Reserve on June 24. The event centered on data from JCHS’ recently released 2025 State of the Nation’s Housing report.
Chris Herbert—JCHS managing director—said in his opening remarks that the “key goal of the report is to provide robust information to inform policy, advocacy and industry as each works to meet the nation’s critical need for good quality, affordable housing and thriving communities.”
“An important goal to release each year is, of course, to share the report’s findings, but perhaps more important is to bring together stakeholders from these different sectors to discuss how the report can help inform and shape the actions needed by policymakers and leaders of both for-profit and nonprofit organizations,” he continued.
Among other things, the report found that affordability is shrinking the rate at which the country adds new homeowners, putting starter homes out of reach for increasingly cost-burdened renters and threatening to price out older generations.
Answering the question of why the event was held at the Boston Fed this year, organization President and CEO Susan Collins said in her welcome address that “housing is deeply tied to the overarching role of the Federal Reserve.”
“While the flow of new housing, in other words, residential investment represents only about 4% of annual U.S. GDP on average, it can have an outsized effect on business cycles,” she continued.
While real estate professionals largely focus on how the Federal Open Market Committee’s choice to raise or lower interest rates affects mortgage rates, Collins pointed to many other ways the Fed system is invested in housing.
She explained that housing can affect wealth, financial markets (via mortgage securities) and local government finances (via property taxes and fees). Constraints in the housing and rental markets, specifically in pricing increases, have placed strains on so many other industries.
“It constrains labor mobility, it limits the ability of businesses to hire. It affects where businesses choose to expand operations and it reduces the wealth building potential that homeownership has historically provided to American families,” she said. “These are just some of the reasons why it’s so important to have a regular in-depth look at housing and, in particular, that is what this report provides.”
Collins went on to discuss how economists for the Fed do a lot of analytical work on the housing market, and how when the Federal Reserve banks gather to discuss issues and when regional presidents connect with their local communities, housing is a main issue frequently brought up. With this insight, regional Feds work to bridge housing gaps through its research and advocacy to other governmental organizations.
She concluded her address by emphasizing that fixing issues in housing, which have developed over many decades, “will take time and persistence.”
“These issues are both urgent and important, and addressing them will require continued creative thinking and collaboration across the public and private sectors as well as among practitioners, researchers and community leaders,” she said. “It’s going to take all of us working together.”
The ‘state of housing’
Diving into the State of Housing report, JCHS Senior Research Associate Daniel McCue took to the stage to break down the three main findings:
“First, high housing costs are a challenge to homebuyers and a burden to homeowners. Second, that high costs are also a challenge for renters and it’s soon to be a greater challenge given that markets are tightening. And lastly, for the lowest income households, given these conditions and others that we’ll talk about, the need for housing assistance has never been higher.”
In terms of high housing costs, McCue explained that according to JCHS’ data, home prices are up 4% year-over-year, which now puts them 60% higher than 2019. He also noted that the median home price surpassed the $400,000 barrier “for the first time ever last year,” now marking five times more than the reported median household income.
McCue also noted that high housing costs are not just prices, but also mortgage rates and payments. JCHS data saw monthly mortgage payments on median-priced homes grow by $90 last year to $2,570 a month, which is $1,100 a month higher than 2021. The average income needed to buy a home has risen to $126,700—and only 6 million of the 46 million renters in the U.S. qualify for this benchmark.
Speaking of renters, the rental market has faced strain from those prices out of the housing market, McCue explained. JCHS found that the rental population grew by 848,000 in 2024. Multifamily construction is attempting to rise to the challenge, with JCHS reporting 608,000 new units built in 2024, the most in about 40 years.
Despite the construction increases, units are continuing to rise in price. JCHS saw that 22.6 million renters are cost burdened, which translates to 50% of the renting population. In addition, more than 12.1 million (27%) are severely burdened, meaning they spend over 50% of their income on their rentals. As McCue puts it, these renters are in “a very precarious financial situation.”
High housing costs aren’t just a barrier to homebuyers and renters. In fact, McCue said they also pose a challenge to existing homeowners as well. Property taxes and home insurance have seen increases, with JCHS reporting that taxes grew 12% from 2021 to 2023, while insurance premiums shot up 57% from 2019 to 2024.
Because of the high housing costs in both markets, McCue emphasized that the “growth in the number of homeowner households was cut in half in 2024 and has dropped even further in early 2025.” He noted that homeownership rates were also hit with a decrease, dropping for the first time in eight years. This caused such a slowdown in the market that “existing home sales hit their lowest point since 1995.”
To meet this challenge head-on, JCHS found that builders started to ramp up the new-home market by offering smaller homes, lower prices and financial incentives. This did ease the burden a bit, as new-home sales grew 3% in 2024. However, tariffs now threaten the housing construction industry by potentially raising the cost of building to “almost $11,000 per unit,” which McCue said could “make additional gains more difficult to achieve in the future.”
While there is also housing assistance available for renters, buyers and homeowners, McCue clarified that most of this population is either aging or disabled and not participating in the workforce. “There’s very little assistance available to help the millions of working families living paycheck to paycheck to make ends meet, and with assistance reaching so few of those in need,” he said, emphasizing increased need for more programs.
Continuing on this thought, McCue also noted that housing assistance needs to increase not just for the currently cost-burdened, but also for the future aging population. Data shows that the “number of householders aged 80 and over is projected to double in the next 20 years, adding nearly 10 million households to this oldest age group.” McCue said that this will bring “increased needs and increased urgency” to the assistance pool.
McCue concluded by saying that all the data JCHS found “points to the fact that now is not the time to step back, but to step up efforts to increase affordability, lower housing costs and address the ever-growing needs of the nation’s households.”
