Housing affordability continues to challenge millions of Americans as rents and home prices rise faster than household incomes.
The U.S. housing shortage is estimated at between 1.5 million and 7.3 million homes, highlighting a supply gap that affects communities nationwide.
What Makes Housing "Affordable"?
Housing is generally considered affordable when a household spends 30% or less of its gross income on housing costs, including utilities.
But a growing number of Americans are exceeding that threshold. As of 2024, 24% of homeowners and 49% of renters were considered cost burdened, spending more than 30% of their income on housing.
The burden is even greater among lower-income households.
Affordable Housing Goes Beyond Subsidized Homes
Government-supported housing is only part of the affordable housing market.
About 75% of existing affordable housing is considered naturally occurring affordable housing, or NOAH. These are market-rate homes that remain affordable to low- and moderate-income households without government subsidies.
Many of these properties are older and increasingly at risk of being lost through deterioration, demolition, conversion, or rising rents.
Federal Programs Support Millions
Several federal programs help households afford rental housing and homeownership.
The Low-Income Housing Tax Credit has helped finance or preserve approximately 4 million affordable rental homes since 1986. HUD rental assistance programs subsidize more than 5 million homes, serving over 8.86 million Americans.
For aspiring homeowners, government-backed mortgages can reduce barriers to buying. In fiscal year 2024, the Federal Housing Administration insured more than 600,000 home-purchase mortgages, with 83% going to first-time buyers.
VA and USDA programs also provide financing opportunities for eligible veterans, servicemembers, and rural homebuyers.
Building More Housing Is Part of the Solution
Federal assistance alone cannot solve the affordability challenge. State and local governments have significant influence over how much housing gets built through zoning, land-use rules, and development policies.
Increasing housing supply, preserving existing lower-cost properties, and improving access to financing are likely to remain central to the national housing affordability debate.
With nearly half of renters already spending more than the traditional affordability benchmark, the bigger question is:
What will it take to make renting—and eventually owning—a home affordable again?
Source: Bipartisan Policy Center
