A report from the Joint Center for Housing Studies of Harvard University, “America’s Rental Housing 2026,” paints a picture of a rental market in transition: softening demand and rising vacancies are finally putting a lid on rent growth, but that relief has come too late for millions of cost-burdened renters, while federal support continues to lag far behind need.
Demand and Supply Both Pull Back
After the record-setting rent increases of the pandemic years, growth has hovered near zero since mid-2023. The executive summary of the report notes that asking rents for professionally managed apartments fell 0.6% year over year in the fourth quarter of 2025, with declines in 74 of the 150 largest markets. Only six markets saw rent growth of 4% or more.
The slowdown traces back to renter demand, which weakened sharply in the back half of 2025. Annual renter household growth peaked at 784,000 in the second quarter before slowing to 366,000 by the fourth quarter, a pullback the report attributes to “slowing job growth, declining consumer sentiment, and restricted immigration.” Vacancy rates climbed to 5.2% in response.
Construction has cooled as well, though it remains historically elevated. Multifamily starts totaled 416,000 units in 2025, which is well off the 2022 peak of 547,000 but still above prepandemic norms. Material costs are a major factor: input prices for residential construction rose 42% between January 2020 and December 2025, compared with just 7% growth over the prior five-year stretch.
A Worsening Affordability Picture
Despite the market cooling, affordability hit another all-time low. Cost-burdened renter households—those spending more than 30% of income on rent and utilities—reached 22.7 million in 2024, including 12.1 million with severe burdens or more than half of income. The overall burden rate has held near 49% since the start of the decade, but that masks a longer trend: burden rates are up 8.8 percentage points since 2001.
What may concern operators most is how far burdens have crept up the income scale. Among renters earning $30,000 to $44,999, 72% were cost burdened in 2024, a 14.9-point increase since 2001. Even households earning $75,000 or more saw their burden rate climb to 14%, up 4.1 points since 2019. For the lowest income renters, the math is especially stark: after paying rent and utilities, the median household earning under $30,000 has just $210 left each month, a 60% drop since 2001.
A core driver is the dwindling supply of lower-cost units. The supply of units renting for under $600 fell by 2.5 million from 2014 to 2024, even as units renting for $1,400 or more grew by 11.8 million.
Strained Safety Net, Aging Stock
Federal rental assistance reaches barely one in four eligible households, and the report flags a real near-term risk: even with the 2026 appropriations bill increasing the Department of Housing and Urban Development’s budget, funding may not be enough to renew contracts for the 2.3 million households served by Housing Choice Vouchers. Meanwhile, cuts to the Supplemental Nutrition Assistance Program and Medicaid in the 2025 reconciliation bill are expected to squeeze household budgets further, which are already stretched by housing costs.
Property condition is a growing liability in its own right. The median age of rental housing reached 45 years in 2023, and the Federal Reserve Bank of Philadelphia estimates that 41% of occupied rental units carried at least one repair need in 2024, totaling $70.1 billion. Add to that the more than 18 million rental units located in counties with at least moderate environmental hazard risk, and the capital needs facing owners and operators are substantial.
The Bottom Line
The report’s framing is double-edged: rent growth is easing and may give renters some breathing room, but the underlying affordability gap, built up over two decades, won’t close on its own. With federal resources constrained, the report notes that “bipartisan solutions to improve housing affordability, increase supply, and meet the needs of the aging rental stock are possible,” pointing to growing state and local innovation as a sign that momentum is building even as Washington’s role shrinks.
Editor’s note: Generative AI was used to summarize the executive summary of the report for this article.