Income required to afford a median-priced home has almost doubled since 2020, report finds

Key Points:

• The US housing market remains subdued in early 2026, with existing home sales near the lowest levels in three decades and new home sales largely unchanged, according to Harvard's Joint Center for Housing Studies annual report.
• New construction starts fell 1% over the past year, led by a 7% decline in single-family home starts, while rental retention rates increased and new rental occupancies decreased.
• Homeownership growth slowed significantly, causing homeownership rates to decline for the second consecutive year, and the growth rate of renters also dropped sharply compared to the previous year.
• Economic uncertainty, including slowed employment growth and a steep decline in consumer confidence due to factors like the Iran war, has dampened housing demand and household formation.
• High home prices and mortgage rates, with median home prices over $400,000 and mortgage payments nearly doubling since 2020, have made housing less affordable, requiring incomes over $120,000 to afford median payments compared to $66,000 in 2020.