New Realtor.com® Report Reveals Housing Affordability Trends Across the U.S.

Realtor.com® Unveils State-by-State Housing Report Card

In the context of a pressing nationwide housing shortage exceeding four million homes, affordability has emerged as a significant issue affecting countless Americans. Recently, Realtor.com® introduced its Grading the States Affordability Homebuilding Report Cards, which provide a comprehensive overview of which states are navigating housing challenges effectively and which are lagging.

Understanding the Report

The report evaluates states based on two critical elements: housing affordability and the capacity to address future supply demands through new construction. Housing affordability is assessed through the REALTORS® Affordability Score along with the percentage of median income allocated to median-priced homes. The homebuilding aspect evaluates the ratio of permits issued per population and the difference in costs between new and existing developments.

“This crisis can only be resolved by increasing the number of homes available,” asserts Damian Eales, CEO of Realtor.com®. “While some states are indeed making headway, a significant number remain trapped in a cycle of escalating housing costs and limited inventory. Our report and the Let America Build campaign aim to highlight these gaps, advocating for decisive solutions from federal, state, and local leaders.”

The Let America Build initiative emphasizes the urgency for policy reforms to boost housing supply while making homeownership both attainable and affordable. To accomplish this, it encourages lawmakers and local communities to adopt smarter zoning laws, streamline permitting, and offer incentives to foster home construction.

Top States for Affordability and Homebuilding

Surprisingly, only 18 states, primarily located in the Midwest and South, are categorized as having median homes affordable to their residents, adhering to the rule that suggests spending no more than 30% of income on housing. Notably, states like Texas, Florida, California, North Carolina, Georgia, Arizona, and South Carolina were responsible for more than half of all construction permits authorized in 2024.

The leading states successfully blend affordability with robust homebuilding initiatives. South Carolina earned the highest rating, an A grade, due to proactive measures that exceeded demand. Both Texas and Iowa followed, with A- scores for different reasons: Texas excelling in new construction, while Iowa is recognized for its affordability.

Meanwhile, states in the South and Midwest consistently received B grades, indicating favorable conditions for housing metrics and construction activities. Notable mentions include Indiana, North Carolina, and Georgia, where the synergy of affordability and homebuilding is evident.

Disparities on the Coasts

Contrastingly, the Northeast and West Coast regions are increasingly hindered by high housing prices, low affordability, and inadequate construction rates. Here, only states with grades below D were found, leaving significant challenges unaddressed. Rhode Island ranks lowest, followed by Massachusetts, New York, Hawaii, and California, where high costs and minimal new construction exacerbate the struggle for affordable housing.

States along the coast typically face stringent zoning regulations, complicating efforts to generate affordable housing. Massachusetts exemplifies this issue, where approximately 76% of its land is restricted by zoning laws.

Conclusion

This latest report from Realtor.com® delineates crucial differences between states in terms of housing affordability and building practices. While certain regions advance with vigorous construction activity, others grapple with inflated prices and sluggish progress. The data underlines the pressing necessity for targeted policies to bridge the ongoing 4 million-home supply gap, ensuring that more Americans can realize the dream of homeownership.

Readers can explore the comprehensive report and interactive maps detailing specific state rankings and scores on Realtor.com.