U.S. Housing Demand Slows as Household Growth Falters

A Harvard Joint Center for Housing Studies report finds that U.S. household growth fell for the third consecutive year in 2025, shrinking to 1.1 million from an average of 2.0 million during the pandemic surge. The slowdown reflects weaker labor markets, heavy student debt, record‑low consumer confidence, and a sharp drop in immigration, with net international migration projected at roughly 321,000 in 2026. Mobility has also stalled, with only 11.2 % of households relocating in 2024 – a historic low.

Affordability pressures remain severe: median existing‑home prices are still about five times median household income, and cost burdens for renters and owners continue to rise. Builders are responding by delivering smaller homes, more townhomes, and incentive‑driven financing, while the share of build‑to‑rent single‑family completions rose to 11 % in 2025. Unsold new‑home inventory increased 54 % over two years, reaching its highest level since 2009.

“Many young adults simply cannot afford to form their own households and are instead doubling up or living with family,” said Daniel McCue, senior research associate at the Joint Center for Housing Studies.