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Affordability remains a top concern for the housing market as sharp interest rate hikes have impacted costs for both homeowners and renters, according to Harvard’s Joint Center for Housing Studies (JCHS).

On the for-sale side, home sales and construction levels have declined, while rental markets are experiencing sharply reduced rent growth and rising vacancy rates. Home prices and rents remain elevated from pre-pandemic levels, leaving millions struggling with cost burdens and priced out of homeownership.

“Housing is a crucial engine of economic growth, and investments in this important sector pay broader dividends,” says Chris Herbert, managing director of the JCHS. “As the pandemic highlighted, high-quality, stable, and affordable housing is foundational to widespread well-being and, as such, both merits and necessitates greater public attention.”

The State of the Nation’s Housing 2023 report highlights how rising mortgage costs have pushed homeownership out of reach for millions of renters at a time when millennials are entering prime home buying ages. The high interest rates have also caused a slowdown in the construction of new single-family homes, despite the ongoing housing shortage, contributing to housing cost issues.

“It’s taken us a long time to get into this [housing] problem, and it’s going to take us a long time to get out,” Herbert said during a webinar announcing the findings of the 2023 report. “We need to say ‘yes and’ to all of the things we need to do, and we need to be persistent. We’re going to be persistent with policy, with industry, and with advocacy.”

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