Affordable Housing Real Estate Statistics

Affordable housing in the United States remains a critical issue in 2025, as supply continues to lag behind demand and affordability challenges persist.

Below is an overview of the key statistics shaping this year’s affordable housing market.

Affordable Housing Supply

The number of new affordable housing units is expected to reach a multiyear high, with approximately 70,500 units completed in 2025. This represents one of the strongest delivery years in recent memory, though it marks a temporary peak before an anticipated decline in future years.
Despite the rise in completions, new housing starts 2024 dropped significantly due to rising construction costs, land shortages, and high interest rates. Developers face ongoing challenges in financing future projects.
Construction costs have increased, with many projects costing 50% to 60% more than five years ago.
Labor and material costs are major roadblocks, with developers reporting that projects that once cost around $70 million now cost $110 million or more.

Affordable Housing Demand

The U.S. affordable housing market needs at least 2.5 million additional homes to meet current demand, especially for low—and middle-income families.
On average, rent in affordable housing units is 25%- 45% lower than market rates, but these properties remain scarce, especially near urban centers.
Some cities, such as San Francisco, Boston, and Los Angeles, have the most significant gaps between market-rate rents (up to $3,000/month or more) and affordable housing rents, which average around $1,800/month.

Affordability Metrics

49% of US households earn incomes that make homeownership out of reach, as the median home price now exceeds $363,000.
Many Americans are considered “house poor,” spending over 30% of their income on housing, with renters and lower-income families hit hardest.
Mortgage rates hover at roughly 6.2%-6.5%, keeping monthly payments high for prospective homeowners.
Despite this, the average income needed to afford a home comfortably has risen sharply, exacerbating gaps in housing accessibility.

Policy Impacts For Affordable Housing

A 12.5% temporary increase in Low-Income Housing Tax Credits (LIHTCs), which ended in 2021, has driven recent peaks in affordable housing completions. However, this policy change leaves uncertainty as new federal initiatives are eagerly awaited.
Developers increasingly rely on PPPs to fund projects, such as collaborations with local governments or school districts to repurpose land for affordable housing. An example includes 650 units developed in partnership with Austin’s school district.
States like California have implemented zoning reforms and tax incentives to boost supply. Yet, strict zoning laws remain a barrier, especially in "high-demand" cities, limiting affordable housing development in core urban areas.

Affordable Housing Regional Highlights

Major metros like New York, Miami, and San Francisco show severe unaffordability with high-cost housing benchmarks. San Francisco tops the chart, with median home values projected to hit $2.5 million.
Secondary markets like Wichita, Omaha, and Des Moines manage better affordable housing balance. Over 90% of the market-rate housing stock is competitively priced relative to affordable housing units.

Regional Analysis of U.S. Affordable Housing in 2025

Affordable housing challenges and opportunities vary across the United States, with regions exhibiting unique trends based on local economies, population changes, and policy approaches.

Here’s a closer look at how affordable housing is shaping up in the Northeast, South, Midwest, and West.

Northeast

The Northeast faces a critical housing supply crunch in many metropolitan areas, as strict zoning regulations and high construction costs limit new development.

Cities like Boston and New York have some of the highest housing costs in the country, and affordable units are especially difficult to find.

Supply and demand: Inventory in the Northeast remains among the lowest nationally. High land acquisition costs and construction expenses continue to deter affordable housing projects. For example, Boston’s median home price is projected to reach $2.8 million by 2025, far above the affordable ranges for most residents.
Affordability concerns: The Northeast is known for its high cost of living, leaving nearly 50% of renters in cities like New York and Boston spending more than 30% of their income on housing. Affordable rental opportunities are few and often have long waitlists.
Policy impacts: States like Massachusetts have begun reforming zoning laws, encouraging multifamily developments. Affordable housing tax credits and local trust funds are being used in cities like Hartford, Connecticut, to finance low-income housing, but the impact remains limited given the demand.

South

The South has experienced a population boom and a surge in affordable housing demand driven by job growth and in-migration.

Cities like Atlanta, Charlotte, and Austin have drawn families and young professionals with promises of better prospects but struggle to balance this with sufficient affordable housing options.

Supply and growth: Many Southern metros show higher housing construction rates than the national average. For instance, Austin and San Antonio lead development efforts, with public-private partnerships producing thousands of new units. However, rising material and labor costs threaten the affordability of these projects.
Affordability: Although housing is cheaper in some regions, rapid price appreciation is outpacing income growth in cities like Nashville and Miami. Miami’s median home price—expected to exceed $500,000, has priced middle, and low-income families out of homeownership.
Policy impacts: Tax incentives and land acquisition programs are fostering affordable housing. Texas and Florida have expanded public-private partnerships to repurpose underutilized spaces, such as school-owned land, for housing, setting an example of innovative solutions.

Midwest

The Midwest is one of the more balanced regions for affordable housing, benefiting from smaller populations, steady demand, and lower development costs.

However, challenges persist in specific urban centers, where housing shortages are becoming more pronounced.

Supply and stability: Cities like Columbus and Indianapolis maintain relatively steady housing supplies with significant investments in new developments. Over 90% of market-rate housing in some Midwest cities remains competitive with affordable units, making the region a leader in affordability efforts.
Affordability: Home prices in smaller cities like Des Moines, Iowa, remain within reach, with median values hovering under $250,000. Still, major Midwestern cities like Chicago are seeing rising rents that financially strain working-class homeowners and renters.
Policy efforts: Many states, including Michigan and Ohio, are introducing more housing tax credits and grants to support low-income communities. Programs to incentivize the reuse of vacant properties into affordable housing through federal historic tax credits are making notable strides.

West

The West is home to some of the country’s most expensive and challenging housing markets. Cities like San Francisco and Los Angeles are experiencing widespread housing unaffordability.

Population growth in Phoenix and Las Vegas further pressures already strained housing inventories.

Supply struggles: Despite high housing starts during the pandemic, construction is slowing due to increasing labor and material costs. San Francisco and Seattle, for example, are seeing limited development of affordable units compared to their needs. LA’s rent now averages nearly $3,000 monthly, with affordable housing opportunities lagging far behind market demand.
Affordability problems: The West contains stark affordability gaps, most visible in cities like San Diego, where affordable rents average $1,800 compared to market rents pushing $3,000. First-time homebuyers face significant barriers due to high mortgage rates and property taxes.
Policy impacts: States like California have led efforts with rent control policies and zoning reforms, but progress remains slow. Expanding modular housing projects and 3D-printed homes are emerging as potential solutions for addressing costs in affordable housing development.

Final Thoughts

The affordable housing market in 2025 is at a crossroads. While new units are being delivered at record levels, challenges in financing, materials costs, and zoning create barriers to ongoing development.

Demand continues to exceed supply by a wide margin, leaving renters and potential homeowners struggling to find suitable living options, especially those from lower-income households.

Government interventions such as expanded tax credits, policy reforms, and stronger public-private partnerships are crucial to narrowing the gap. However, without immediate action and long-term strategies, the affordability crisis is unlikely to ease, keeping housing out of reach for millions of Americans.

Frequently Asked Questions

What is the biggest issue with affordable housing?

The biggest isuse is the gap between rising housing costs and stagnant incomes, making it difficult for many to afford basic housing.

What is the current situation with American housing affordability?

Millions of Americans face high housing costs, with over 30% of renters spending more than a third of their income on rent.

How many people in America need affordable housing?

According to national data, around 7.8 million low-income households urgently need affordable rental housing.

Which country has the most affordable housing?

Countries like India and South Africa often have more affordable housing due to lower construction costs and income-adjusted pricing.

Why is affordable housing important in the US?

It ensures stable living conditions, supports economic mobility, and reduces homelessness, benefiting individuals and communities.