The housing landscape in 2025 is growing more difficult for both renters and homeowners, as a combination of rising costs and reduced support strains household budgets nationwide. After years of steady increases, home buying has slowed to levels not seen since the mid-1990s. The culprit: high prices and elevated interest rates that have pushed many potential buyers out of the market.
Housing costs climbing nationwide
Harvard’s Joint Center for Housing Studies (JCHS) released a report in early 2024 showing that the median price for an existing single-family home reached a record $412,500, according to the National Association of Realtors. That figure is now five times greater than the median household income, well above the affordability mark of three times a person’s income. The State of the Nation’s Housing study shows that national home prices have jumped 60% since 2019.
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At the same time, growing property taxes and higher insurance premiums are pushing up monthly housing costs, adding pressure to both homeowners and landlords. Renters, too, are feeling the growing pressure. Despite a surge in new apartment construction, rents remain high. More households are now spending a large portion of their income on rent, a threshold known as being “cost-burdened.”
In 2023, 22.6 million renter households, half of all U.S. renters, were cost-burdened, spending more than 30% of their income on housing. Of those, more than 12 million were severely burdened, paying over half their income in rent.
While lower-income renters bear the most impact, cost burdens are rising for middle-income households, too.
The growing threshold is contributing to a sharp rise in homelessness across the country. In January 2024, the U.S. recorded 771,480 people experiencing homelessness, a 33% increase since 2020.
Climate change is also playing a growing role. Wildfires in several states have caused widespread destruction, emphasizing the risks that climate-related disasters pose to the nation’s housing supply.
Federal housing support, once a critical safety net for millions of Americans, is shrinking. With uncertainty looming over future funding, many low-income families face reduced access to assistance programs they rely on.
Inventory grows, but affordability remains out of reach
As prices climbed, existing home sales dropped to just 4.06 million in 2024, the lowest yearly total since 1995. This slowdown in sales helped build up the for-sale inventory, which rose 20% in March 2025. Much of the increase was driven by homes sitting longer on the market.
As affordability barriers rose, growth in the number of homeowner households slowed, dropping from 1.25 million in 2023 to 613,000 in 2024.
The national homeownership rate dropped for the first time in eight years, falling to 65.6% in 2024, and then to 65.1% in early 2025. The clearest decline came from households under age 35, whose homeownership rate fell 1.4 percentage points in one year.
Inequalities in income and wealth are also keeping homeownership out of reach for many. The gap between white and Hispanic homeownership rates grew slightly to 25.2 percentage points in 2024, while the white to Black gap remained at 27.7 points, showing no progress after previous years of improvement.
More Americans turn to renting
With fewer households able to buy, the renter population is surging. Between 2019 and 2022, renter growth averaged 171,000 per year. That jumped to 408,000 in 2023 and then 848,000 in 2024, according to the Census Bureau’s Housing Vacancy Survey.
Developers have responded to the growing demand, completing 608,000 new multifamily rental units in 2024. That’s the most in nearly four decades, according to Harvard’s JCHS.
Tariffs, immigration and future economic risks
Looking ahead, new economic pressures may deepen housing challenges, according to Harvard researchers. Homebuilders estimate that recently imposed tariffs on construction materials will raise the cost of a new home by nearly $11,000. At the same time, reduced immigration could shrink the already tight construction labor force. About one-third of all U.S. construction workers are foreign nationals.
