Persistent Affordability Challenges and Rising Economic Uncertainty Squeeze U.S. Housing Conditions

Persistent Affordability Challenges and Rising Economic Uncertainty Squeeze U.S. Housing Conditions

U.S.: Persistent affordability challenges and rising economic uncertainty are weakening U.S. housing conditions, with household growth slowing for the third consecutive year from an average of 2 million in 2021 to 1.1 million in 2025 due to weaker labor markets, student debt and financial uncertainty, while residential mobility fell to a record-low 11.2% in 2024 and net international migration declined by 50% in 2025 with a further 75% drop expected in 2026. Single-family housing starts fell 7% in 2025, and the affordable housing shortage remains severe, with 11 million extremely low-income renter households competing for just 3.8 million affordable units, while the number of units renting for under USD 1,000 per month declined by more than 7 million between 2014 and 2024. In 2024, 22.7 million renter households (49%) were cost-burdened, including 12.1 million (26%) facing severe burdens, while property taxes increased 31% between 2019 and 2025 and average monthly insurance premiums rose 72%. Home prices have climbed 54% since 2020, the median existing single-family home price reached nearly five times the median household income in 2025, existing home sales remained at a three-decade low of 4.1 million, and the national homeownership rate declined for the second consecutive year, with the report also highlighting that federal housing assistance remains profoundly underfunded despite state and local efforts to expand housing supply.

Source: HBS Dealer