Harvard Housing Report Shows Housing Affordability Crisis Was Never a Guarantee

A fresh Harvard Joint Center for Housing Studies release paints a stark picture: housing affordability is slipping from a post‑war anomaly to the new baseline for most Americans.

Why housing affordability has become a structural defect

Half a century ago, researchers warned that only the wealthiest could keep pace with rising home prices. By 1975, just ↓ 27% of families could afford a median‑priced house, a warning that seemed to fade during the low‑rate boom of the 1990s.

Today’s data tell a different story. The median price of a new single‑family home in 2025 hit $417,400, while median household income lingered around $120,800, creating a price‑to‑income ratio of 5.0 – a stark rise from the 3.2 ratio of the 1990s.

“If you were middle class, homeownership was almost inevitable,” said Ali Wolf, chief economist at Zonda. “Now you need wealth or luck.”

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Equity accumulation has surged, with aggregate homeowner equity reaching $34 trillion in Q4 2025 – an increase of ↑ 88% since 2019, according to Harvard. The average homeowner now holds roughly $295,000 in equity, a buffer that disproportionately benefits children of owners.

Labor market slack compounds the problem. In 2025 the U.S. added only 116,000 jobs – the smallest non‑recession gain since 2003 – and student‑loan delinquencies spiked to 10% after pandemic relief ended. Household formation fell to 1.1 million new households, while mobility stalled at a record‑low 11.2% of Americans moving in a year.

Immigration, once the engine of renter growth, collapsed from 2.7 million net newcomers in 2024 to ↓ 1.3 million in 2025, with projections of just 321,000 in 2026. Harvard warns this decline will “substantially affect household growth over time.”

Federal assistance has receded. Rental aid covers only one in four ultra‑low‑income renters, leaving nearly 13.8 million eligible households without help. HUD’s proposed removal of disparate‑impact language threatens to erode fair‑housing safeguards.

These dynamics echo findings from Reuters on the widening wealth gap, and they are inseparable from the pandemic era’s housing boom that inflated prices by more than 50% between 2020 and 2022.