A new report from Harvard University shows that activity in the U.S. housing market is still low this year due to high costs. The Joint Center for Housing Studies released its annual “State of the Nation’s Housing” report, revealing that existing home sales are near their lowest point in 30 years, a level first reached in 2023.
Sales of new homes stayed about the same, with more people choosing to rent and fewer new homes being occupied. New construction started dropped by 1% over the past year, mainly because single-family home starts fell by 7%. The report explains that while there are still shortages in supply, low demand has become a key issue in housing recently. The number of homeowner households and renters has grown more slowly than last year.
Economic uncertainty is affecting housing demand. Job growth has slowed significantly, dropping from a gain of 1.5 million jobs in 2024 to just 116,000 in 2025. Meanwhile, consumer confidence has fallen due to the ongoing war in Iran.
High prices and a lack of affordable housing options are making it difficult for people to buy homes. The report states that median home prices now exceed $400,000 and have risen by 54% since 2020, with mortgage rates above 6%. This has increased the typical payment for a median-priced home to $3,100, requiring an income of over $120,000 to afford it.
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