The Housing Crisis: How We Got Here, Who It’s Hurting, and What It’s Going to Take to Fix It

There is a number that should stop you in your tracks.

On a single night in January 2024, 771,480 people experienced homelessness in the United States. That was the highest number ever recorded by federal agencies. An 18 percent increase from the year before. The largest single-year jump in recent history. [1]

And it didn’t happen in a vacuum. It happened against the backdrop of a housing market so expensive, so locked, and so fundamentally broken for working Americans that the connection between the two is no longer debatable. When rents outpace wages and home prices climb beyond reach, people fall. And the falling has been accelerating.

The Market: What the Numbers Actually Show

Start with prices. Home prices are up 60 percent nationwide since 2019 and still rising. [2] The median existing single-family home price hit $412,500 in 2024 — roughly five times the median household income. The traditional affordability benchmark has historically been a price-to-income ratio of three. We are now at five. That gap isn’t a rounding error. It’s a generational barrier. [2]

Interest rates compound the problem. With mortgage rates holding above 6 percent, monthly payments on the median-priced home reached $3,100 in the fourth quarter of 2025 — up from $1,700 in early 2020. To afford that payment comfortably, a household needs an income above $120,000. In 2020, the same threshold was $66,000. [3]

Existing home sales hit a 30-year low in 2023 and have barely recovered. Lower consumer confidence, softer job growth, and persistently high costs are keeping buyers on the sidelines. [4] Employment growth dropped from 1.5 million jobs added in 2024 to just 116,000 in 2025 — and consumer confidence fell to an all-time low in April 2026, below even the levels seen during the 2008 Great Recession and the pandemic. [3]

The lock-in effect makes it worse. Roughly 80 percent of existing mortgage holders have a rate at or below 6 percent. [5] They have no financial incentive to sell, move up, or move down — because doing so means trading a locked-in rate for one that costs significantly more per month. So inventory stays frozen. First-time buyers compete for a thin slice of available homes. And prices hold.

The Supply Problem Nobody Wants to Fix

At the root of all of this is a shortage. The United States is short approximately 6 million homes. [6] That shortfall didn’t appear overnight — it was built up over decades of restrictive zoning, slow permitting, labor shortages in construction, and rising material costs that made building simply too expensive or too complicated in the places where people most need to live.

The National Association of Home Builders estimates that the residential construction sector needs to add roughly 740,000 workers a year just to keep pace with growth, retirements, and departures from the industry. [5] Material costs have been running above 3 percent annual growth since mid-2025 despite weak construction demand. [5] Building is slow. Building is expensive. And the regulatory environment in many high-demand cities makes it even slower and more expensive.

The consequences fall hardest on the lowest end of the market. The number of rental units priced below $1,000 per month — roughly the affordability threshold for a household earning $40,000 per year — has declined by 7 million over the last decade. Those units weren’t replaced. They were lost outright or converted to higher rents. [3] The number of homes listed for sale that are affordable to households earning $75,000 or less dropped 60 percent between March 2019 and March 2026. [3]

And at the very bottom — the households with the lowest incomes — 11 million extremely low-income renters are competing for just 3.8 million affordable and available units. A gap of 7.2 million homes. [3]

The Rent Side of the Crisis

Owning is out of reach for millions. But renting isn’t a refuge either.

There is no state in the United States where a full-time minimum wage worker can afford a one-bedroom apartment at fair market rent. To afford a two-bedroom apartment at fair market rent nationally, a worker needs to earn $27.50 per hour. Federal minimum wage sits at $7.25. [7] That gap — between what housing costs and what the lowest-wage workers earn — is not a policy failure at the margins. It is a fundamental structural mismatch between the cost of existing and the income available to millions of Americans.

Seventy percent of the lowest-wage households spend more than half their income on rent — leaving almost nothing for food, healthcare, transportation, or an emergency. [7] When the unexpected happens — a car repair, a medical bill, a lost shift — there is no cushion. There is just the edge.

From 2001 to 2023, median rents increased 23 percent after adjusting for inflation while renters’ median incomes rose just 5 percent. The gap widens every year. According to research by the U.S. Government Accountability Office, when a community’s median rent increased by just $100, homelessness rose by 9 percent. [8] The connection is direct and documented.

Homelessness: The End of the Line

The homelessness numbers are the result of everything described above — playing out at the human level, one family and one individual at a time.

In January 2024 the count reached 771,480. In January 2025 it declined modestly to approximately 745,000 — the first decrease after years of sharp increases, though experts caution that the improvement is not uniform and may reflect changes in how and where data is collected as much as actual reduction in need. [9]

The 2024 surge was sweeping. Families with children increased 57 percent between 2022 and 2024. [10] Children under 18 experiencing homelessness on a single night in 2024 increased 33 percent year over year. [1] Chronic homelessness — defined as long-term or repeatedly homeless with a disabling condition — has increased every year since 2002 and reached nearly 170,000 people in 2025. [10]

Forty percent of people experiencing homelessness have a job. Employment doesn’t guarantee housing anymore — wages simply haven’t kept pace with what housing costs. [7] Nearly 30 percent of homeless populations have severe mental illness, yet only one in four receives consistent treatment. [11] The mental health and housing crises are intertwined — each one making the other harder to solve.

California and New York together account for 44 percent of all homelessness in America. [12] Houston — with lower minimum lot sizes, fewer regulatory barriers, and more permissive zoning — has a homelessness rate 15 times lower than Los Angeles despite comparable population and climate. [6] That comparison is not an accident. Supply matters. Regulation matters. Land use policy matters.

People who experience homelessness die nearly 30 years earlier than the average American — often from easily preventable or treatable illnesses. [13] This is not a social issue happening at the margins of American life. It is a public health emergency playing out in every city in the country.

What Works — and What the Research Actually Shows

Housing First — the approach that prioritizes getting people into stable housing before addressing other issues like mental health or substance use — has a documented track record. Cities using permanent supportive housing have seen 78 percent reductions in recurring homelessness over five years. [11] Veteran homelessness has declined 18 percent since 2016 through sustained investment in housing assistance combined with clear accountability for results and community partnerships. [10]

The evidence on what moves the needle is not particularly mysterious. More affordable units built. Rental assistance that actually reaches people. Eviction prevention before crisis hits. Permanent supportive housing for the chronically homeless. And zoning reform that allows more homes to be built in the places where people need to live.

What the research also shows is the scale of the political will required. The 2023 Housing and Opportunity Act injected $82 billion into housing vouchers and construction. Shelter capacity grew 5 percent nationally. But only 38 percent of those effectively eligible access services — blocked by waitlists, eligibility hurdles, and capacity constraints that mean the help doesn’t reach everyone who needs it. [11]

The Bottom Line

The American housing crisis is not one problem. It’s an interconnected cascade — of insufficient supply, unaffordable prices, stagnant wages, and a safety net that wasn’t built for the scale of the need that now exists.

The median home price is five times the median income. There are zero states where minimum wage covers rent. Nearly 750,000 people slept outside or in shelters on a single January night in 2025. And the shortage of affordable units runs into the millions.

None of this is inevitable. Houston proved that zoning policy changes outcomes. The decline in veteran homelessness proved that sustained investment and accountability change outcomes. The question is whether the political will exists to scale those solutions to match the size of the problem.

Right now, it doesn’t. But the cost of inaction — in human suffering, in public health, in economic productivity lost — is not free either. It just falls on the people least able to absorb it.

Sources

— [1] National Alliance to End Homelessness. State of Homelessness: 2025 Edition. endhomelessness.org. April 2026.

— [2] Harvard Joint Center for Housing Studies. New Report Highlights Unease in the Housing Market Amid a Worsening Affordability Crisis — State of the Nation’s Housing 2025. jchs.harvard.edu.

— [3] Harvard Joint Center for Housing Studies. Ten Takeaways from the 2026 State of the Nation’s Housing. jchs.harvard.edu. 2026.

— [4] Forbes Advisor. Housing Market Predictions For 2026: When Will Home Prices Drop? forbes.com. May 2026.

— [5] National Association of Home Builders. 2026 Housing Outlook: Ongoing Challenges, Cautious Optimism and Incremental Gains. nahb.org. February 2026.

— [6] American Enterprise Institute Housing Center. Map Shows States With Higher Rates of Homelessness. aei.org. Citing Sissi Li, AEI Housing Center analysis.

— [7] United States Interagency Council on Homelessness. Homelessness Data and Trends. usich.gov.

— [8] National Alliance to End Homelessness. State of Homelessness: 2025 Edition — rent and homelessness relationship. Citing U.S. Government Accountability Office data. endhomelessness.org.

— [9] HUD. 2025 Annual Homelessness Assessment Report: Point-in-Time Estimates. hud.gov. May 2026.

— [10] Urban Institute. Homelessness and Housing Program Trends by State. urban.org. 2026.

— [11] Saint Augustine’s University. Homelessness in the US: Stats and Future Trends 2025. explore.st-aug.edu. Citing 2025 Urban Institute permanent supportive housing study.

— [12] The Global Statistics. Homeless Statistics in US 2026. theglobalstatistics.com. June 2026.

— [13] United States Interagency Council on Homelessness. Homelessness Data and Trends — health and mortality outcomes. usich.gov.

— [14] J.P. Morgan. The Outlook for the US Housing Market in 2026. jpmorgan.com.

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