Home prices nationwide have surged more than 60% since 2019, pushing the median price of a single-family home to a record high of $412,500 in 2024.

That’s well above what’s traditionally considered “affordable,” said Federal Reserve Bank of Boston President and CEO Susan M. Collins. What can be done to address the crisis?

That question was in focus during “The State of the Nation’s Housing 2025.” The event Tuesday was cohosted by the Harvard Joint Center for Housing Studies and the Federal Reserve Banks of Atlanta, Boston, Cleveland, Dallas, Minneapolis, New York, Philadelphia, and San Francisco.

The conference included the release of the center’s annual housing report, as well as discussions about ongoing research and possible solutions.

Collins said housing was “deeply tied” to the Federal Reserve’s mission to support a strong and stable economy that works for everyone. She said the affordability crisis impacts labor markets, limits businesses’ hiring abilities, and reduces families’ potential to build wealth as homeowners.

Collins added that people repeatedly bring up housing during her travels across New England to speak with residents. They tell her about supply constraints, high construction costs, and challenges posed by zoning laws, barriers to credit, and more.

“Addressing (these issues) will require continued creative thinking and collaboration across the public and private sectors, as well as among practitioners, researchers, and community leaders,” she said. “It will take all of us.”

How does housing impact the broader economy? 

Eric Belsky, the director of the Federal Reserve Board’s Division of Consumer and Community Affairs, said the U.S. housing market has “enormous implications” for the economy. It also impacts both parts of the Federal Reserve’s dual mandate from Congress to promote maximum employment and price stability, he said.

Housing is the largest single expense for most households, and that impacts how the Fed thinks about monetary policy, Belsky said. That’s because so much of the housing industry depends on financing, so it’s very sensitive to interest rate changes.

Housing costs and home prices also affect economic cycles, Belsky said.

“As home prices rise, existing owners experience an increase in wealth … and it can give a significant lift to overall consumer spending,” he said.

At the same time, the more money people must spend on housing, the less they have left to pay for goods and services, or emergency expenses, he said.

“When people are hard-pressed to save given very high housing costs … they’re vulnerable to all sorts of other shocks,” Belsky said.

And when home prices fall under extreme circumstances and combine with high unemployment rates, housing can also pose financial stability risks, Belsky added.

Fed community affairs leaders share research on housing, potential solutions

During a panel discussion, led by Boston Fed Community Affairs Officer Prabal Chakrabarti, regional Reserve Bank officials spoke about collaborating with residents on housing challenges through public discussions and research.

At the Minneapolis Fed, recent research on multifamily housing stock found that owners struggled to find property managers and repair staff to maintain them, according to Libby Starling, a senior community development advisor.

“We heard … (from across) the industry that there are many buildings just one thunderstorm away from having to close,” she said.

Samantha Porter, a community engagement senior advisor at the Philadelphia Fed, said her team’s been hearing about the housing struggles faced by retirees and older adults.

“Older folks are feeling that they’re locked into a housing situation that’s too expensive … or they’re finding that there are very few options that help support their continued independent aging-in-place,” Porter said.

Elizabeth Kneebone, an assistant vice president of community engagement and analysis for the San Francisco Fed, said recent research by her team focused on the types of homes that are more affordable for first-time buyers. Those include smaller homes, town homes, duplexes, and co-ops.

“Part of this research is also (about) … what are some of the solution sets or strategies different stakeholders are trying to expand those (homeownership) opportunities?” she said.

At the Richmond Fed, researchers are collaborating with the public, private, nonprofit, and philanthropic sectors to better understand local housing and other economic issues, according to community development regional manager Jared Elwell.

“It just highlights how much of a priority housing has become all across the country, at all income levels, (in) all types of communities,” he said.

Check out the event livestream, and read more about the housing crisis in New England, on bostonfed.org.