Advocates of deregulation-oriented solutions to the affordable-housing crisis continue to notch wins in liberal and conservative states, including California’s “by right” housing reforms and a recently passed package of permitting reforms known as the “Montana Miracle.” Notable changes include the liberalization of the rules governing the construction of accessory dwelling units(ADUs) and the repeal of parking mandates.

But according to a new report, there’s much more work to be done. “The State of the Nation’s Housing,” published by the Harvard Joint Center for Housing Studies, provides an annual “snapshot” of how our fellow citizens fare “in finding and affording a place to live.” This year’s edition isn’t unrelentingly bleak. But its findings are hardly encouraging.

• Construction “softened in 2025,” with housing starts slipping “1% to 1.4 million … extending the slowdown from the 1.6 million-unit peak in 2021.” New single-family structures fell 7%, “to 940,600, down from 1 million units in 2024 and the 1.1 million-unit peak in 2021.” The decline “followed an increase in the number of new homes completed but not yet sold.” The inventory of ready-for-first-residency homes rose “54% over the last two years,” with 127,000 units”waiting to be bought, “the most since 2009 and a significant disincentive to additional construction.”
• An aging population likely contributes to developers’ reluctance to build. Between 2015 and 2025, “the number of adults age 65 and over rose from 48 to 65 million … increasing their share of the population by 4 percentage points to 19%.” In the same decade, “the number of adults age 80 and over grew from 12 to 15 million.” Meanwhile, the U.S. fertility rate is at rock bottom.
• “Home price growth has slowed substantially in recent years,” with an increase of “just 0.7% year over year in February 2026, down from 4% a year earlier and well below the 20.7% peak of early 2022.” Nice to hear. But “prices remain exceedingly high,” soaring since January 2020 “more than 54% — almost 25% after adjusting for inflation.” The burden is particularly heavy “in most large markets.” And for “the fifth straight year, the median sales price for an existing single-family home hovered near five times the median household income, falling slightly from the all-time high of 5.0 in 2022 to 4.7 in 2025.” The “ratio was 4.1 in 2019 and averaged 3.2 throughout the 1990s.”
• An increase “in the number of homes available for purchase” is “helping to further moderate home price growth, though inventories are still limited.” At the start of the lockdown, 1.67 million units were on the market. In March 2026, the comparable number was 17% smaller, a mark “even further below the levels from the mid-2010s, when markets were more balanced.”
• There’s a “massive deficit … of units affordable to low-income households.” Analyzing data from a “recent update to a 2025 analysis published by the National Association of Realtors … and Realtor.com,” Harvard’s researchers determined that “the number of listings affordable to households earning under $75,000” in March 2026 was “down more than 60% since March 2019.”

The “increasingly stagnant job market is undercutting housing demand.” The vibrant post-lockdown employment recovery has fizzled. In 2025, “the nation gained … just “116,000 jobs,” the “lowest level in a non-recession year since 2002.” Lethargy has persisted into the new year. The U.S. Bureau of Labor Statistics recently documented that from “March 2025 to March 2026, nonfarm payroll employment increased in eight metropolitan areas, decreased in eight areas, and was essentially unchanged in 371 areas.” Little wonder, then, that consumer confidence hit “a record low in 2025,” and the portion of U.S. households that relocated “fell to 11.2% in 2024, according to the [Census Bureau], lower than any point in the 20-year history of the survey.”

While Harvard’s report provides valuable data, its policy agenda is disappointingly predictable. Given the center’s commitment to “equitable access to decent, affordable homes in thriving communities,” it’s not surprising that government interventions are preferred. “Arizona, Massachusetts, Michigan, New York and Oregon administer revolving construction loan funds for mixed-income multifamily rental housing,” and last year, “both Colorado and Nevada started construction loan programs to support lower-cost homes.”

Chicago’s “Green Social Housing Ordinance” receives praise. Funded with $135 million from a $1.25 billion “development bond,”the measure created a nonprofit entity to operate “independently of the Department of Housing,” combining “the efficiency of the private sector with lasting community benefits.” The goal is to advance the “Climate Action Plan and Environmental Justice Action Plan,” protecting Chicago’s “natural resources, reduce emissions and help residents thrive.” The scheme almost invites waste in the Windy City.