Harvard’s Housing Report Highlights Affordability Challenges

Affordability challenges and economic uncertainty persist across the U.S., according to the 2026 State of the Nation’s Housing report from the Joint Center for Housing Studies of Harvard University. 

Slowed Demand 

The report found that household growth slowed for the third consecutive year in 2025, falling by 15% to 1.1 million net new households. This was below pandemic averages of 2.0 million in 2020-2021 but similar to the pace of the 2010s. 

Drivers of housing demand have slowed due to several factors, including a weakened job market and a near-record-low consumer confidence level. Residential mobility also fell to a record low of 11.2% in 2024, and mortgage rates remained above 6.5% in 2024 and 2025.  

Unaffordability and Uncertainty 

JCHS reported that total housing starts fell slightly by 1% to 1.36 million last year, extending the slowdown from the pandemic-era surge. Single-family home starts fell 7% in 2025 to 940,000, down from 1 million units in 2024 and the 1.1 million-unit peak in 2021. 

While homebuilders sought to increase affordability in 2025, new home sales dipped 1%, and multifamily completions declined sharply by 20%. Still, multifamily completions outnumbered starts, suggesting continued slowdown.  

In Q1 2026, the homeowner vacancy rate was 1.1%, up from a 70-year low of 0.7% in Q2 2023, while renter vacancy rose to 7.3% from a 40-year low of 5.6% in Q2 2022.  

Additionally, in the rental market in 2024, 11 million households with extremely low incomes competed for just 3.8 million rental units that were both affordable and available, translating to just 35 accessible units per 100 households. 

Homeownership Barriers 

In February 2026, home prices rose 0.7% year-over-year, indicating cooling prices nationwide. Prices fell from 2025 in 41 of the largest markets in the U.S., compared to only nine markets in 2025. 

For the fifth consecutive year, the median sales price for an existing single-family home hovered around five times the median household income, according to the report. 

In Pennsylvania, the state’s housing report showed the median sales price was up 9.4% year-over-year in February, hitting $279,000. 

Nationwide, inventory remains 17% below pre-pandemic levels (1.67 million available in March 2019) but was up 5% year-on-year in March 2026 (1.39 million), according to the JCHS. 

In Pennsylvania, inventory is down 47% compared to 2019 with about 29,800 listings on the market in February 2026. In March, listings were up 5.6% year-over-year, according to PAR’s housing market report. 

“Home sales have stagnated,” JCHS notes. “In 2025, existing home sales were unchanged from 2024 at 4.1 million, stuck at a 30-year low that is two-thirds of the 6.1 million sales in 2021.” 

The report adds that the monthly mortgage payment on a median-priced home is $2,420, which is consistent with the record-high payments in early 2025. After conservatively factoring in estimates for mortgage insurance, property insurance and property taxes, JCHS approximates total monthly homeownership costs at $3,120. 

Moreover, the income needed to afford payments on the median-priced home was $120,800 at the end of 2025, up from $68,700 in 2020. In 169 of the nation’s largest 387 metros, the required income exceeded $100,000 (up from 31 in 2020).