Housing demand is slowing across the country, and North Carolina is feeling it too, a Harvard housing researcher told a Raleigh conference last week. Alexander Hermann, a senior research associate at Harvard's Joint Center for Housing Studies, laid out the numbers Thursday, Oct. 22, at the N.C. Affordable Housing Conference (via NC Newsline).
The two-day conference, put on by the N.C. Housing Finance Agency, the N.C. Housing Coalition and Centrant Community Capital, drew about 1,400 registrants. Hermann's message for the builders, lenders and housing officials in the audience was a mixed one: fewer new households are forming, but plenty of people already here can't afford what's on the market.
Hermann pointed to a stack of reasons demand is easing. High home prices and rents and higher interest rates are the big ones. A weak job market, the restart of student loan payments and a drop in the immigrant population are also slowing the rate at which young adults move out and set up their own homes. More of them are staying with their parents.
That lines up with the Joint Center's 2026 State of the Nation's Housing report, released in June. According to a summary from the National Low Income Housing Coalition, the report found new household formation fell 16% in 2025 from the year before, the third straight year of slowing, and immigration dropped by roughly half. Total housing construction slipped 1% in 2025, with single-family construction down 7% while multifamily rose slightly.
On the ownership side, Hermann said the monthly payment on a median-priced home ran under $2,300 in 2020, climbed to about $3,000 in 2022 and peaked just under $3,400 in 2025. He said prices in Charlotte and Raleigh have risen faster than the national average in recent years. He also cited National Association of Realtors data putting the median age of first-time buyers at about 40.
Renters aren't getting much relief either. Rent growth has been flat since 2023, Hermann said, but rents are still about a third higher than in 2019. In North Carolina, five of the six markets RealPage tracks were flat or down; Wilmington was the exception, up 4.5%. Nationally, a record 22.7 million renter households were cost-burdened in 2024, meaning they spent more than 30% of income on housing.
In North Carolina, Hermann said 730,000 renter households are cost-burdened, about 100,000 more than before the pandemic and nearly twice as many as in 2001. Of those, 380,000 spend more than half their income on housing.
Looking ahead, he said projections for household growth over the next 10 to 20 years are well below recent and historical levels, mostly because of an aging population and falling birth rates, and lower still if immigration stays modest. A slower pace gives the market a chance to catch up, he said, but the state still needs more housing.
Scott Farmer, executive director of the N.C. Housing Finance Agency, said affordable housing has become a major topic for national, state and local leaders. Samuel Gunter, who leads the N.C. Housing Coalition, said affordability problems now reach families across the income range.
Why it matters for Contractors
If you build for sale in North Carolina, the takeaway is that the market isn't running out of need, it's running out of buyers who can pay today's prices and rates. Slower household growth means you can't count on population alone to sell homes the way it did a few years ago. Hermann's numbers point to unmet need at lower price points, not at the top of the market.
For trades that work on apartments, flat rents and more cautious developers can mean fewer new starts on the board. On the other hand, the gap Hermann described for lower-income renters is the kind of thing state housing finance programs are built to address, so keep an eye on what the N.C. Housing Finance Agency funds.
None of this is a forecast for your town specifically. Wilmington's rents are still rising while other North Carolina markets are flat, so check local permit and rent trends before you plan next year's work.