Annual JCHS Report Finds Housing Affordability Challenges Persist; Issues Strong Call for Action
The Joint Center for Housing Studies (JCHS) of Harvard University earlier today released its annual State of the Nation’s Housing Report for 2025. The report, of which NCSHA is a sponsor, states clearly that housing affordability in the United States “remains in crisis.” The report documents how, despite slight increases in inventories of for-ownership and rental housing, housing costs still increased and remained unaffordable for many working families. JCHS calls on federal, state, and local government leaders, as well as the private sector, to explore solutions to address the affordable housing shortage.
JCHS released the report with a conference this afternoon at the Federal Reserve Bank of Boston. Sessions included remarks from Chris Herbert, managing director of JCHS, and Susan M. Collins, president of the Boston Federal Reserve; a panel featuring Massachusetts housing leaders; and a discussion with senior officials from several Federal Reserve banks. Watch the webcast here.
JCHS also published a fact sheet summarizing the report.
Rising Costs for Home Buyers and Homeowners Hold Back Single-Family Market
The JCHS report finds that overall home sales declined in 2024 to a 30-year low. Driving the decline was an increase in mortgage interest rates, rising insurance premiums and property taxes leading to increased costs, and the inability of households to save for a down payment. Despite inventories of for-sale homes increasing 17 percent annually in January 2025, these increased costs still offset the inventory increase. It is worth noting that, even with the increase, the supply of for-sale homes remains substantially below the pre-pandemic years, when inventory was already low by historical standards.
Despite slowing sales, home prices continue to increase, pricing many households out of the market. Home prices increased 4.7 percent in 2024, up 53 percent over five years. The median existing home sale price in 2024 was $407,600. This represents a home price-to-rent ratio of five-to-one, significantly higher than the three-to-one ratio that is considered normal.
JCHS notes that rising insurance premiums and property taxes have also increased the financial strain on many current homeowners. The report cites research from Freddie Mac showing that the average annual homeowner insurance premium payment increased by 14 percent in 2024 ($211) to $1,761 and is now up by a total of 62 percent ($672) in just five years. In addition, because of rising home values, property tax payments increased an average of 12 percent ($455) to $4,380, between 2021 and 2023.
As a result of these increased costs, the number of homeowners who are considered “cost burdened” (spending 30 percent or more of their monthly income on housing) increased by more than 600,000 in 2023 alone. This reverses a trend of decline in cost burdens for homeowners from 2010 to 2019. JCHS reports that more than 20 million homeowners, nearly 24 percent, are now cost burdened, 2.5 percent more than in 2019.
Many Renters Still Cost Burdened
The JCHS report finds that, despite historically elevated levels of new multifamily homes hitting the market, they have not been able to keep up with demand in many markets, leading to a decrease in affordable apartments. Specifically, in 2024, 608,000 units were completed, the most in nearly 30 years — only just enough to absorb the 849,000 renter households who entered that market last year. Consequently, rental vacancies decreased in a large majority of metro markets last year, and average rents increased in two-thirds of markets (though they did decline in the other third). JCHS also notes multifamily starts have dropped significantly in recent years, meaning the nation’s rental housing stock will grow more slowly in the coming years.
At the same time, the number of affordable apartments available in the market has continued to shrink. Between 2013 and 2023, the number of units renting for an inflation-adjusted $1,000 per month or less fell by more than 30 percent, while those renting for $2,000 or more nearly tripled from 3.6 million to 9.1 million. This has exacerbated the housing cost burden facing many renters. JCHS reports that, between 2019 and 2023, the share of renters with cost burdens increased in 43 of 50 states and in 89 of the nation’s 100 largest metro areas. More than half of all renters were burdened in 13 states and in 50 of the 100 largest metro areas.
A Problem That Can’t “Be Left Unaddressed”
JCHS expresses concerns that the affordable housing supply shortage will worsen in the coming years, citing the possible impact of tariffs, possible funding cuts in federal housing programs, the availability of construction labor, rising construction costs, and climate-related disasters. Each and all of these developments, JCHS warns, could exacerbate the affordable housing crisis, making it imperative that policymakers and industry take action to boost the development of affordable homes. Failure to do so, JCHS argues, would hurt not only the housing market but economic growth in general.
JCHS concludes the report with a dire warning that America’s single-family and multifamily “housing crises have grown in urgency over the last two decades and can no longer be left unaddressed. Solutions can be expensive and difficult, but the financial and human costs of inaction are much steeper.”
