Housing costs and shortages deepen as U.S. household growth slows

High housing costs are no longer just squeezing monthly budgets. They are delaying the moment many young adults move out, marry and start families, a demographic slowdown that has left the U.S. forming far fewer new households than it did at the start of the decade.

The Harvard Joint Center for Housing Studies said household growth slowed for a third straight year in 2025, falling to 1.1 million households. That was well below the annual average of 2.0 million in 2020 and 2021 and closer to the more modest pace of the 2010s, a shift that signals weaker housing demand at the same time that affordability remains stretched.

Researchers said the slowdown reflected reduced household formation among young adults, weakened job markets, burdensome student debt and low consumer sentiment. They also pointed to weakening labor markets and plummeting immigration as forces that have dampened both household growth and mobility, reinforcing a pattern in which people are staying put longer and moving less often.

The broader housing market is feeling that strain. Sales of existing homes are at three-decade lows, while inventories are rising because homebuying costs remain high. In the multifamily market, rents fell as demand slipped and vacancies rose. At the same time, nearly half of renter households were cost burdened in 2024, meaning they spent more than 30% of income on housing, and the pressure is worsening for homeowners as well.

The report warned that the nation’s supply of low-rent housing is shrinking and that market forces alone are unlikely to produce enough deeply affordable homes. Federal housing assistance remains profoundly underfunded, leaving states and localities to lean on zoning reforms, tax credits, housing trust funds and other tools to try to close the gap.

The findings were presented Wednesday, June 17, 2026, at a release event featuring Chris Herbert and Daniel McCue of the Harvard Joint Center for Housing Studies, along with Marietta Rodriguez of NeighborWorks America, Stockton Williams of the National Council of State Housing Agencies and Sharon Wilson Géno of the National Multifamily Housing Council. Taken together, the data show a housing crisis that now reaches beyond rent checks and mortgage rates: it is slowing the creation of new households and reshaping the country’s economic and social mobility.