Affordability and Homebuilding: State-by-State Report Cards

Highlighted finds:

• States in the South and Midwest lead the nation in terms of current housing affordability.
• Southern and Western states are building the most homes, with just seven states from these two regions accounting for over half of the permits issued for new-home construction in 2024.
• We assigned letter grades to measure housing provision based on current affordability and current construction, as a proxy for future affordability. With this approach, no state received an A+, and only one A and two A- final grades were given out, as all 50 states and DC have room for improvement.
• States in the South and Midwest received all of the good grades given out (A’s and B’s) on the basis of affordability and homebuilding; states in the West and Northeast, with generally stricter zoning and land use regulations, received all of the bad grades (D’s and F’s).

It has become harder and harder to become a homeowner, with high prices and mortgage rates remaining the unfortunate reality, and increasing the supply of homes is the clear solution. States have a clear mandate to address housing affordability, so we are assigning grades based on how they are doing now and how well they are addressing the future by building affordable homes. Our score is a weighted average of percentile ranks across two affordability metrics and two new construction metrics:

• REALTORS® Affordability Score: 25%
• Median earner’s share of income spent on median-priced listing (ranked low to high): 25%
• Permit-to-population ratio: 40%
• New-construction premium (ranked low to high): 10%

Read the full article here.