City and county officials across the country list housing affordability as a top priority. If they were looking for a year of predictability, 2025 has not been it.

Uncertainty surrounding the economy and the future of federal housing assistance has exacerbated the nation’s “already-enormous housing challenges,” according to the “State of the Nation’s Housing 2025” report by the Joint Center for Housing Studies at Harvard University. 

The report, published in June, found that home prices across the country are up 60% since 2019 — and rising. Here are five takeaways from the report for local government leaders.

1. Unaffordability is reaching record highs

The median existing single-family home price hit a record high of $412,000 in 2024 — five times the median household income, according to JCHS. Subsequently, existing home sales have plunged, with just 4 million homes sold last year, the lowest number since 1995.

Renting has also become increasingly burdensome, with a record 50% of renters spending more than half their income on rent in 2023. The issue is widespread, with the share of cost-burdened renters increasing in 43 states and in 89 of the country’s largest metro areas between 2019 and 2023.

2. Homeownership is declining

Homeownership rates declined in 2024 for the first time since 2016, falling to 65.6%, according to JCHS. They fell again in the first quarter of 2025, to 65.1%.  

The largest decline in homeownership — by 1.4% in 2024 — was among households led by people under the age of 35.

Homelessness also reached record highs in 2024, surging 33% since January 2020. 

3. State and local governments will need to play a larger role

In May, the Trump administration announced plans to slash around $33 billion from the U.S. Department of Housing and Urban Development budget, diminishing housing aid that states and local governments have come to rely on. 

“Looking forward, state and local governments will undoubtedly play a larger role in addressing record-breaking housing needs as the federal government contemplates the withdrawal of vital supports,” the JCHS report states. 

Nationwide, more than 800 local government housing trust funds and 350 municipal rental assistance programs have been set up to finance affordable housing, according to JCHS.

However, if the federal government moves forward with proposed cutbacks, local leaders will face difficult spending decisions. “The federal government underpins many state and local programs, and the scale of that funding and assistance will be nearly impossible to replace,” according to JCHS.

4. Finding ways to increase housing supply is ‘critical’ 

Increasing new housing supply “remains critical for alleviating affordability pressures and stimulating economic growth,” the JCHS report states. It recommends local governments explore multiple methods to unlock additional housing development, including: 

• Implementing zoning reforms.
• Revisiting restrictive land-use policies.
• Creating financing tools for developers.
• Providing design assistance for “missing middle” housing types, such as accessory dwelling units and small multifamily buildings.

“Continued innovations by state and local governments regarding housing policies, regulations and financing models will help" address housing needs, the report states.

5. Climate disasters are a growing risk for housing

Increasingly severe and frequent climate disasters represent a growing risk to housing supply in 2025, according to the report. Damages from climate-related disasters in 2024 amounted to more than $180 billion. 

Hurricane Helene in the Southeast in 2024 and the Palisades and Eaton wildfires in Southern California earlier this year severely damaged or destroyed more than 20,000 homes. More than 61 million homes in the U.S. are currently in areas with “at least moderate hazard risk,” the report states.

“In the wake of disasters, homes may be destroyed and rents can rise as displaced households seek temporary accommodations from an already-strained stock,” it states. 

Such events are also causing increases in home insurance premiums, which surged 57% from 2019 to 2024, the report states, citing data from the Federal Home Loan Mortgage Corp., or Freddie Mac.