A Big Picture of the US Housing Market

The annual The State of the Nation’s Housing report from the Joint Center for Housing Studies at Harvard University paints a grim picture of the U.S. housing market, writes Jared Brey in Governing. “High interest rates, supply constraints and growth in home insurance premiums are all driving housing costs,” according to the report. 

Both renters and homebuyers are suffering, with only one in seven renter households being able to afford the cost of a first home. “Home prices hit an all-time high in the early months of 2024, with prices rising in 97 out of the 100 biggest markets. Home insurance premiums also rose an average of 21 percent last year, while property taxes are increasing and mortgage interest rates remain close to their two-decade peak.” Rising insurance rates are driving up housing costs around the country, particularly in states like California and Florida that are hard-hit by climate disasters.

“There is some news that’s more positive. Nearly 450,000 new apartments were finished in 2023, the highest rate in about three decades, according to the report. The influx of new supply coincided with a slowdown in the rate of rent growth.” However, average rents remain above pre-pandemic levels in most markets.