U.S. housing market: three pressure points behind the record-low vacancy

The vacancy rate for owner-occupied homes in the United States fell to 0.7% in 2025, the lowest level in 70 years, according to Harvard University's Joint Center for Housing Studies. The national homeownership rate ticked up to 65.8%. That headline number masks a deeper problem: there are almost no homes available for sale or rent, and the ones that exist cost more than ever.

Homeowners insurance premiums rose 11.3% in 2025, the biggest single-year increase on record. In states such as Florida and California, premiums climbed even faster. The report found that 12% of homeowners now go without insurance entirely, up from 5% a decade ago. For renters, landlords pass higher property insurance costs through to tenants. The Joint Center estimates that insurance costs now account for roughly 8% of total monthly housing costs in high-risk markets, up from 4% in 2020.

A household earning the median U.S. income of $83,500 can afford a home priced at roughly $280,000 under standard mortgage underwriting. The median home costs $419,300. The $139,300 gap between what households can afford and what homes cost is the widest since the Joint Center began tracking it in 1975. Two factors drive it: home prices have risen faster than incomes for four consecutive years, and mortgage rates averaged 6.7% in 2025, up from 3.1% in 2021. A household that could afford a $400,000 home at 3.1% can now afford only $310,000 at 6.7%, assuming the same down payment and income.