More Americans are experiencing the impacts of the nation’s worsening housing affordability crisis. Families are struggling to remain housed in an environment where many renters can narrowly afford their housing costs, disasters are endangering communities, and homeownership slips further out of reach.
These are key findings from a new national report from Harvard’s Joint Center for Housing Studies (JCHS), The State of the Nation’s Housing 2025. The report found that households are still grappling with high purchasing and rental costs, despite a rise in multifamily housing completions in 2024, and growth in the inventory of homes for sale in 98 of the nation’s 100 largest metro areas in early 2025. Housing innovations, state and local government leadership, and the revival of federal investments will be crucial for progress toward affordable housing for all, the report states.
Cost Burdens Trigger Instability
Cost burdens for renters and homeowners persist, especially for those with the lowest incomes. While 24% of all homeowners are now spending over 30% of their income on housing costs, cost burden challenges are even more pervasive among renter households. In 2023, 50% of all renters, or 22.6 million households, were cost-burdened, and 12.1 million (27%) were severely cost-burdened — spending over 50% of their income on housing. According to the Center, 65% of working age renters do not have enough residual income after paying for housing to cover daily items, such as healthcare or food, and must make trade-offs to maintain their housing.
The effects of housing cost-burdens vary significantly across racial groups, due to historical discriminatory housing policies that have disadvantaged households of color, the report states. In 2023, 57% of Black, 53% of Hispanic, and 50% of multiracial renter households were cost-burdened, compared to 46% of their white counterparts. Renters with disabilities, older adults on a fixed income, and those who have difficulty securing full-time work were also disproportionately impacted by housing affordability challenges. JCHS further reports that while disadvantaged, vulnerable, and the lowest income renters experience higher shares of cost burden, the same phenomenon is becoming more prevalent for middle-income households earning $30,000 to $74,999 annually.
Housing Challenges at the Intersection of Disasters and Property Insurance
Across the country, increasingly severe disasters and extreme weather events continue to result in housing instability, displacement, and the destruction of homes in the nation’s already limited housing stock. JCHS cites a recent report from The Brookings Institution, co-written by Rachel Drew, former senior research director at Enterprise; Andrew Jakabovics, vice president for policy development at Enterprise; and other colleagues. The report finds that in the wake of a disaster, a housing market can potentially see rents increase 4-6% more relative to rents in similar, non-impacted markets, as well as high rates of people experiencing post-disaster homelessness (in the short- or long-term).
These ever-frequent disasters are not only deepening the housing supply shortage — they are also fueling the national property insurance crisis. As insurers drive up premium costs, limit coverage availability, file non-renewals, or completely stop servicing certain states and regions that are at greater risk of environmental hazards, homeowners and nonprofit property owners and operators must either completely forgo insurance (if they own their property without any debt) or rely on state-run insurance plans that are often unable to support consumers to the extent necessary due to limited funds to cover claims. Rising insurance premiums were a major factor in the 26% growth in operating costs for multifamily owners and operators from 2022 to 2023.
The JCHS report calls for several Congressional and federal actions to mitigate disaster risks and curb rising insurance rates, including appropriating additional HUD Community Development Block Grant-Disaster Recovery funds to help communities with long-term recovery, preserving and increasing funding for Federal Emergency Management Agency programs that help communities build resilience, and improving methods for communicating hazards risks to community members.
Beyond Unlocking the Housing Supply
While the nation’s overall housing supply remains in a significant deficit, with estimates varying from a shortage of 1.5 million to 3.7 million units, housing inventories have slowly begun to level up. Yet even as the supply of multifamily housing has increased, the stock of low-cost rentals has not kept pace with the affordability needs of households across the country. Between 2013 and 2023, the stock of units with rents below $1,000 per month dropped by over 30% from 24.8 million to 17.2 million. Challenges with construction, such as regulatory barriers, shortages of construction workers, and rising building material and land costs are also worsening supply shortages in the multifamily and single-family markets. These obstacles are contributing to high costs for renters and homeowners.
Additionally, homeowners must manage costly mortgage rates and general economic uncertainty, complications that are keeping many prospective buyers on the sidelines and limiting options for even moderate and higher-income households to make the move from owning to renting.
The report emphasizes the need to continue pursuing construction techniques, building methods, and policy changes that enable more affordable and accessible development. For example, the report discusses land use and zoning reforms that allow for a broad range of housing types, including accessory dwelling units and “missing middle” homes, as well as policies and programs that simplify the use of off-site construction methods. Enterprise’s Making it Happen issue brief series explores best practices for scaling these affordable housing innovations.
Preserving and Expanding Federal Rental Assistance
Despite the moderating in rent increases nationwide, average monthly rents for professionally managed units remain high historically, registering at $1,830 in the first quarter of 2025, 32% higher than in the same quarter of 2019. As asking rents stay elevated, the federal rental assistance system is at risk of serving even fewer households than it already does. JCHS reports that in 2021, federal rental assistance programs served about 5.1 million renters, or about 25% of all income-eligible households, leaving 14.2 million without support. Recent federal resource and staff reductions, proposed budget cuts, delayed grant disbursements, and insufficient appropriations from the 119th Congress threaten the loss of even more Housing Choice Vouchers and other forms of rental assistance that are in use by low-income households across the country.
The report further points out insufficient funding and risks of housing losses in other federal assistance programs, such as the Rental Assistance Demonstration program, the U.S. Department of Agriculture Section 515 program, and the Low-Income Housing Tax Credit (Housing Credit) program, where many units are reaching their Qualified Contract exit point. JCHS notes that without strengthening and expanding these critical programs, the number of people experiencing homelessness — which reached a record high of 771,480 people as of the most recent reported count on a single night in January 2024 — could continue to soar. The report points to localities that have utilized Housing First strategies to successfully reduce rates of homelessness, some of which are highlighted in Enterprise’s fact sheet on evidence-based solutions to end the homelessness crisis.
Looking Ahead
The nation’s housing crisis is intensifying as the country contends with deep uncertainty regarding federal policy actions. In addition to confronting the persistent housing challenges detailed in the JCHS report, policymakers must also consider how plunging immigration rates, the aging baby boomer population, and ever-changing tariff policies may impact the housing market and the broader economy. The report stresses that the nation has gone too long without adequately addressing the housing crisis, noting that now is the time to employ proven housing affordability solutions and test innovations that enhance these measures. From investing in new financing models that support renters and first-time homebuyers to strengthening disaster preparedness across the country, state and local governments will have to take the lead in implementing policies to change the nation’s course. However, state and local efforts can only scale with strong levels of federal funding. While the level of federal support is unknown, the report conveys that waiting to invest in solutions is no longer an option.
