Housing challenges ‘demand coordinated action,’ report says 

A new study suggests that a concerted effort is needed to help the nation break free of its low-demand, low supply housing cycle.

In its annual State of the Nation's Housing report released earlier this month, Harvard University's Joint Center for Housing Studies (JCHS) concluded that the U.S. "faces interlocking housing crises — affordability, homelessness, climate change and discrimination — that demand coordinated action across federal, state, local, private and nonprofit actors."

Weak demand, supply: Existing conditions continue to feed into feeble supply and demand — a cycle that may be challenging to break in the short term, according to the report.

Household growth continued to slow for the third consecutive year in 2025, weakening demand. The drop in household formation is occurring as young adults struggle with a "low-hire, low-fire" job market, deep student debt and low consumer sentiment. Reduced immigration has also dampened household growth and mobility, the report said.

With demand low, new home construction has also slowed despite the nationwide housing shortage, which economists have said only got worse in 2025. Meanwhile, existing homeowners are reluctant to put their properties on the market and move themselves, further weakening demand.

"Although supply shortages are still a major concern, depressed demand became a headline over the past year," JCHS Senior Research Associate Daniel McCue wrote in a blog post. "Without a job, graduates are less likely to form a new household or move to a new region. Without confidence in employment, families are less likely to move or make a big purchase like a house."

Many people are unable to move: Household residential mobility poses another problem. The homeowner mobility rate fell from 5.5% in 2023 to 5.1% in 2024, according to the U.S. Census Bureau's American Community Survey. The overall mobility rate in 2024 was 11.2% — a record low. The decline was especially evident among younger homeowners, many of whom entered the market as first-time buyers, the JCHS report noted.

Low-price housing units disappearing: Among the most serious concerns highlighted in the report is the shrinking levels of housing options for those with low and moderate incomes. With construction costs rising for land, materials and permits, the market rate units are becoming too expensive for these renters and would-be buyers. 

"The number of units renting for less than $1,000 per month in inflation-adjusted terms dropped by more than 30 percent between 2014 and 2024," the report said. That has led to 11 million low-income renters competing for just 3.8 million units, according to National Low Income Housing Coalition data cited in the report.

At the federal level, the study noted that the expansion of the Low-Income Housing Tax Credits program through the One Big Beautiful Bill Act of 2025 "will help somewhat," as will the 21st Century ROAD to Housing Act, if it becomes law. But cuts to other public housing programs won't.

"States and localities are innovating financing models to fill some of these gaps, but the affordability crisis is nationwide and only the federal government has the scale of resources needed to meaningfully reduce the shortage of housing to those with the lowest incomes," the report said.

Less demand ahead as immigration falls: The country's sharp decline in immigration is another factor driving housing demand down. Citing Census data, the JCHS reported that international migration fell by more than half between 2024 and 2025, from 2.7 million to 1.3 million — and the projected total of 321,000 for 2026 "will substantially suppress population growth, especially in states that have relied on immigration."

This downturn may further slow household growth, though it could take years to see the impact. The biggest short-term change, the report said, will likely be felt in the rental market.