Harvard researchers document the increased costs and challenges for finding homes for both tenants and owners
A new report from one of the nation’s premiere housing research groups confirms that many of us already know. Residential real estate is making an increasingly insane effort to separate itself from ordinary Americans and create a more expensive, achievable and functional market for everyone.
The status of National Housing 2025 from Harvard University’s Centre for Housing Studies provides detailed figures.
- In 2024, home prices reached an all-time high, with a median value of $412,500.
- The borrower needs an annual income of at least $126,700 to provide mortgage payments at that price home, and uses the traditional lender ratio for income on 31% of debt.
- As of 2023, only 6 million of the country’s nearly 46 million renters can meet this benchmark.
- As of 2023, a whopping half of all tenants were “costs” and the latest data is available. This means that more than 30% of your income is spent on housing and utility projects. This includes 27%, who spend more than half of their income on those expenses.
You can see what these numbers actually look like in the chart below.
Are young people complaining about the high cost of housing? Americans are constantly growing to buy a home, and many seniors remember that mortgage rates were double digits. However, on one measure, conditions were rarely so challenging.
The median home was five times greater than the median household income in 2024, according to the report. Back in 1990, the only other period when this ratio was high was in 2005, at the height of the subprime bubble.
Of course, one of the oldest truths about housing is that all the properties are local. There are still many places where the dollar grows even further. Consider: Borrowers will need an income of $595,389 to provide a median home in the San Jose Metro area, California. But you can get a typical home in Waterloo Cedar Falls, Iowa, or Charleston, West Virginia for a tenth.
Finally, it is worth remembering that it is not just the house for purchase that is being pulled out of reach. Rent is still too expensive for too many Americans.
There are several policies that may help ease high costs. Whitney Airgood Obrikki, a senior researcher at Harvard’s Center for Housing Studies, told USA Today.
Zoning tends to be the first point of friction. Allowing apartment complexes in places zoned for a single family can soften that. But reforms need to surpass that change.
“We can build a building as easily as possible,” Airgood Obrikki said.
That’s what federal and state subsidies could help in the form of vouchers and public housing, Airgood-obrycki added.
The Harvard Report reminds readers that “cost burden” comes with human sacrifice. In January 2024, 771,480 people were homeless, an increase of 33% since January 2020.
