Soaring housing costs, elevated mortgage rates and growing economic uncertainty are making homeownership increasingly unattainable for millions of Americans, according to a new report released by Harvard University’s Joint Center for Housing Studies.
The annual State of the Nation’s Housing 2026 report paints a concerning picture of the US housing market, where affordability challenges continue to deepen despite slowing demand and a rise in housing vacancies. The study found that many homeowners are reluctant to sell their properties because they are locked into low-interest mortgages obtained during previous years, while prospective buyers are struggling to afford increasingly expensive homes and borrowing costs.
According to the report, the median price of an existing single-family home has surged by 54% since 2020. At the same time, mortgage rates have remained above 6%, significantly increasing monthly housing payments and pushing homeownership beyond the reach of many households. Existing home sales have remained at a three-decade low, reflecting a market where both buyers and sellers are hesitant to move.
Researchers noted that the housing market is experiencing what many experts describe as a “lock-in effect.” Homeowners who secured mortgages at historically low interest rates during the pandemic are choosing to stay put rather than purchase another property at current rates. This has reduced mobility and further constrained housing supply, making it difficult for new buyers to enter the market. The report recorded a historic low residential mobility rate of 11.2% in 2024, largely driven by fewer homeowners changing residences.
The affordability crisis is also affecting broader demographic and economic trends. Household formation slowed sharply in 2025, dropping to 1.1 million new households, compared to an average of two million annually in 2021. Young adults, burdened by student debt, weaker job prospects and economic uncertainty, are increasingly delaying major life decisions such as moving out, renting independently or purchasing a home. Many are instead choosing to live with family members or share housing costs with others.
While demand has softened, the report warns that affordable housing remains in critically short supply. More than 11 million extremely low-income renter households are competing for just 3.8 million affordable and available rental units nationwide. Additionally, the stock of low-cost rental housing has declined significantly over the past decade, leaving vulnerable families with fewer options.
The burden is not limited to renters. Homeowners are also facing rising property taxes and insurance premiums, both of which have increased sharply in recent years. Harvard researchers found that property taxes rose by 31% between 2019 and 2025, while average monthly insurance costs jumped by 72%, driven partly by climate-related risks and severe weather events.
The report concludes that although state and local governments are experimenting with measures to increase housing supply and improve affordability, federal assistance remains insufficient to address the scale of the crisis. Researchers warned that without stronger policy interventions and greater investment in affordable housing, millions of Americans could continue to face mounting housing insecurity in the years ahead.
