The nation’s rental market is seeing record-setting demand, reduced vacancies, increasing rents, and stagnant resident incomes, according to a new report from Harvard University’s Joint Center for Housing Studies (JCHS). These trends are contributing to the growing affordability crisis even with a surge in multifamily construction.

Renters today make up a diverse population across generations and income types, with the share of all U.S. households who rent reaching the highest level since the mid-1960s, rising to 37% in 2015 from 31% in 2005, according to America’s Rental Housing: Expanding Options for Diverse and Growing Demand.  Within the past decade, the rental market has increased by 9 million households to nearly 43 million.

Multifamily construction also has accelerated over the past 10 years, but that still isn’t meeting the demand. According to the report, the renter housing stock expanded by approximately 8.2 million units over the past decade, including new construction and single-family homes entering the market. As of the end of the third quarter, starts were on track to add roughly 400,000 housing units, with the majority for rent, this year. 

“There’s been a strong market response to a dramatic increase in demand,” says Jonathan Spader, senior research associate at the JCHS.  “But the question is whether the market response will continue and if the units will keep up pace and match renter needs.”

The median rents of the new market-rate apartments coming online are out of reach for many households. That median rent hit $1,372 in 2014, a 26% increase from the prior year. However, roughly 1 in 5 renters earn less than $15,000 annually and would require rents to be less than $400 to afford them.

The report shows that between 2003 and 2013, new construction only contributed 5% to the rental housing stock at those affordable levels, while conversions of single-family homes from owner-occupancy contributed 2%, and downward filtering of higher-cost units contributed 11%.

Of the nation’s 43 million renter households, nearly half—a record-setting 21.3 million in 2014—face housing cost burdens, spending more than 30% of income on housing and utility costs. This includes a record-setting 11.4 million renter households with severe housing cost burdens, meaning they spend more than 50% of income on housing and utility costs.

“The lack of affordable housing is truly a national problem,” says Mijo Vodopic, a program officer at the John D. and Catherine T. MacArthur Foundation, which supported the report along with the JCHS’ Policy Advisory Board.

There’s another contributing factor to the cost issue: Housing units with such low rents are vulnerable to deterioration. Approximately 12% of the units that rent for less than $400 a month have structural or maintenance issues. Also, 11% of units renting in that price range in 2003 had been lost from the housing stock by 2013, and that number is expected to grow as affordable-use periods for 2.2 million federally assisted units will expire over the next 10 years.