Home prices across the United States have increased by more than 60% since 2019, reaching a median price of $412,500 for a single-family home in 2024. This sharp rise has pushed housing beyond traditional affordability standards, according to Susan M. Collins, President and CEO of the Federal Reserve Bank of Boston.

The issue was central to discussions at "The State of the Nation’s Housing 2025" event held on Tuesday. The event was cohosted by the Harvard Joint Center for Housing Studies and several Federal Reserve Banks, including those from Atlanta, Boston, Cleveland, Dallas, Minneapolis, New York, Philadelphia, and San Francisco.

The conference saw the release of the center's annual housing report and included dialogues on ongoing research and potential solutions to the crisis. Collins emphasized that housing is integral to the Federal Reserve's mission of maintaining a stable economy. She highlighted how the affordability crisis affects labor markets by limiting hiring capabilities and diminishing families' opportunities to build wealth through homeownership.

Collins shared that during her travels in New England, residents frequently mention issues such as supply constraints and high construction costs. They also face challenges related to zoning laws and barriers to credit.

"Addressing (these issues) will require continued creative thinking and collaboration across the public and private sectors," Collins said.

Eric Belsky from the Federal Reserve Board noted that housing significantly impacts both employment and price stability—key components of the Fed's mandate. He explained how housing expenses influence monetary policy due to their dependence on financing sensitive to interest rate changes.

Belsky pointed out that rising home prices can increase wealth for existing homeowners, boosting consumer spending but leaving less money for other expenses when housing costs are high.

Samantha Porter from the Philadelphia Fed noted that retirees face difficulties with expensive housing options or limited choices for independent aging-in-place.

Elizabeth Kneebone from the San Francisco Fed mentioned research focusing on affordable homes for first-time buyers like smaller homes and duplexes.

Jared Elwell from Richmond Fed spoke about collaborations with various sectors to understand local housing issues better. He remarked on how prioritizing housing has become essential nationwide across all communities.

The event highlighted various regional efforts addressing these challenges through public engagement and research initiatives.

For further details about the event or information on New England's housing crisis, visit bostonfed.org.

Contact our media relations team for connections with Boston Fed economists or other resources.

Amanda Blanco is part of the communications team at the Federal Reserve Bank of Boston.