Housing demand is increasingly constrained by delayed household formation. The Harvard Joint Center for Housing Studies (JCHS) reports that household growth slowed for the third consecutive year in 2025, falling to 1.1 million households after averaging 2.0 million in 2020–2021. The slowdown is concentrated among young adults, who face a weaker job market, student-debt burdens, low confidence, high rents, high home prices, and mortgage rates that remain historically restrictive.¹

More young adults are staying with family. The National Association of Home Builders’ (NAHB) analysis of the 2024 American Community Survey finds that 32.5% of adults ages 18–34 lived with their parents in 2024, up from 31.8% in 2023, interrupting the post-pandemic trend of moving out. NAHB also finds large state differences, with New Jersey at 44%, Connecticut at 41%, California at 39%, and Maryland at 38%, while North Dakota and South Dakota were far lower at 12% and 18%, respectively. The pattern points directly to affordability: states with higher renter cost burdens tend to have more young adults living at home.²

Mobility is also weak. Harvard JCHS reports that the share of households relocating fell to a record-low 11.2% in 2024, with homeowner mobility down to 5.1% and renter mobility at 22.6%. The lock-in effect is central: many homeowners still hold mortgage rates far below current market rates, reducing listings, limiting trade-up activity, and suppressing geographic mobility. This limits housing turnover and can restrain labor mobility, especially for younger workers and families trying to move toward opportunity.¹

Immigration and aging add a longer-term constraint. Harvard JCHS reports net international migration fell from 2.7 million in 2024 to 1.3 million in 2025, and the Census Bureau projects it could fall to 321,000 in 2026, which would weigh on the population growth and, over time, renter household formation. At the same time, older households are becoming a larger share of the market, increasing demand for remodeling, accessible housing, and aging-in-place solutions while gradually increasing household dissolutions among older cohorts.¹

The implication is a mixed housing signal. Affordability keeps many potential first-time buyers in rentals or family homes, supporting some rental demand, but weak household growth and lower immigration cap the upside.² Consumption is also affected: households that spend more on rent, insurance, property taxes, debt service, and utilities have less room for discretionary purchases, making consumer demand more income-segmented and region-specific.³

Taken together, these trends point to a housing market defined less by broad-based growth and more by segmentation. Demand remains present, but affordability pressures, delayed household formation, low mobility, and slowing population growth will shape where, and for whom, that demand translates into activity.