Housing affordability remains a significant and persistent challenge nationwide. Renters continue to experience high cost burdens, while homeownership remains both difficult to attain for many households and more expensive to maintain.

These are the core findings from an annual report from Harvard University, the State of the Nation's Housing 2026, which provides an overview of housing conditions across the United States. The report finds that renters and homeowners alike are struggling to afford their housing. At the same time, the pace of new housing construction has slowed, and existing resources to preserve and expand affordable housing, including rental assistance and affordable housing development programs, remain insufficient.

Despite the pressing challenges, the report points to housing and land use innovations as potential solutions, while also highlighting promising policy proposals such as continued funding for the Community Development Block Grant program and broader federal investments in housing affordability, including those included in the 21st Century ROAD to Housing Act. Overall, the report concludes that greater federal investment will be needed to improve housing affordability at the scale required to meet the nation's housing needs, even as state and local governments have pursued a range of strategies to address housing affordability,

We focus on five key findings from the 2026 report, including: high rent burdens, increasing housing costs for homeowners, the need for more rental assistance, slowing affordable housing production, and the unequal impacts of housing affordability challenges across different populations. The report finds that households of color continue to face some of the greatest housing affordability challenges, reflecting longstanding disparities in access to affordable housing.

High Rent Burdens

Rent burdens remain high. In 2024, nearly half of all renter households, 22.7 million households nationwide, are rent burdened, meaning they spent more than 30 percent of their income on housing. This includes 12.1 million households who are severely rent burdened, meaning they spent more than half of their income on housing costs. These trends persist despite modest declines in median rents. Nationally, asking rents for professionally managed apartments remain substantially above pre-pandemic levels and have continued to increase in a number of high-cost metropolitan areas, like San Francisco and Honolulu.

Affordability challenges are particularly acute among households with the lowest incomes. Eighty-three percent of renters earning less than $30,000 annually are rent burdened, and 67 percent are severely rent burdened. As housing costs consume a growing share of household income, many renters have fewer resources available for other necessities, increasing the risk of financial hardship and housing instability.

Homeownership is Becoming More Expensive

Homeownership affordability continues to be shaped by rising costs. Home price appreciation has slowed relative to recent years, with homes appreciating 0.4 percent last year as opposed to 4 percent in the year before. However, prices remain significantly higher than they were before the pandemic. High home prices and the rising non-mortgage costs associated with homeownership are creating a growing cost burden for homeowners.

Nationally, home prices have increased by 54 percent since 2020. The median home price is nearly five times the median household income, substantially higher than the historical price-to-income ratio, which averaged 3.2 throughout the 1990s. While mortgage interest rates declined modestly in 2025, these reductions have generally not been sufficient to offset the impact of higher home prices.

As a result, access to homeownership remains challenging for many households. The national homeownership rate declined for the second consecutive year, and growth in the number of homeowner households was the slowest observed in a decade. Younger households under the age of 35 and households of color experienced some of the largest declines in homeownership rates.

Affordability challenges are not limited to prospective homebuyers. Existing homeowners are increasingly affected by rising non-mortgage housing costs, including property taxes, insurance premiums, utilities, and maintenance expenses. Between 2019 and 2025, property taxes increased substantially nationwide, while homeowners' insurance costs rose sharply in many regions, particularly those vulnerable to natural disasters. These increases have contributed to growth in homeowner cost burdens. Nationally, 20.7 million homeowners, or 24 percent of homeowners nationwide, are now spending over 30 percent of their income on housing-related expenses. Lower-income homeowners, older adults living on fixed incomes, and homeowners of color are most adversely affected by the rising cost of homeownership.

More Rental Assistance Needed

The report emphasizes the continued importance of rental assistance programs, like the Housing Choice Voucher program, in addressing housing affordability challenges. Despite substantial need, only about one-quarter of income-eligible households currently receive federal housing assistance. As of 2023, approximately 13.8 million income-eligible households remained unassisted, including millions experiencing severe housing needs. The report notes that while funding for vouchers rose by around 7 percent in 2026 appropriations, this increase is not enough to sustain current voucher allocations given rising rents and will result in a shortfall of vouchers.

Production of Affordable Housing Stalls as Existing Affordable Housing Stock Shrinks

Housing supply constraints continue to contribute to affordability challenges. Housing production slowed in 2025, while shortages of housing affordable to low- and moderate-income households persisted. Much of the new housing being produced remains unaffordable to lower-income households. At the same time, the stock of lower-cost rental housing continues to decline. Over the past decade, the number of rental units with inflation-adjusted rents below $1,000 per month has fallen substantially, while higher-rent units have increased. These trends suggest that market-rate construction alone is unlikely to meet the housing needs of lower-income households without additional public investment and policy intervention.

At the same time, the supply of existing rental properties dedicated to low-income households is declining. The number of affordable units managed by public housing authorities has decreased due to chronic underfunding, deferred maintenance, and the deterioration of aging properties. In rural areas, affordable rental properties financed through USDA's Section 515 have paid off their mortgages, exiting the program and losing rental assistance in the process. Looking forward, affordability restrictions on many properties financed through the Low-Income Housing Tax Credit (LIHTC) program are set to expire over the coming decade, placing additional affordable units at risk of conversion to market-rate housing.

Disparities Remain a Central Housing Policy Challenge

Across multiple indicators, the report finds that housing affordability challenges continue to disproportionately affect low-income households and communities of color. These disparities are reflected in renter and homeowner cost burdens, homeownership rates, and exposure to housing instability. Rising housing costs can increase the risk of housing instability, housing loss, and homelessness, particularly for households with limited financial resources including those displaced by natural disasters.

The report also highlights several recent federal policy changes that may affect housing affordability and stability. These include the weakening of fair housing enforcement mechanisms, proposed shifts in disaster recovery responsibilities, and the early termination of Inflation Reduction Act tax credits that supported energy-efficiency retrofits. While the long-term effects of these changes remain uncertain, they could disproportionately affect households with limited financial resources and communities already experiencing housing-related challenges.

Final Takeaways

Despite the continued challenges, the report points to housing innovations at the state and local levels as communities try to address the affordability crisis. In particular, the report highlights housing trust funds, state and locally issued bonds, and state LIHTC programs as innovative approaches to support affordable housing financing. In addition to financing tools, land use innovations including zoning reform and allowing new types of housing development like ADUs and scaling off-site construction can help move the needle on affordable housing production.

While the Joint Center highlights promising state and local efforts to improve housing affordability, the report concludes that addressing the nation's housing challenges at scale will require greater federal investment. The authors point to the importance of sustained funding for programs that support affordable housing development, preservation, and rental assistance. As housing affordability challenges continue to affect households across the country, the private sector and federal, state, and local policymakers all have a role to play in ensuring access to safe, stable, and affordable housing.