If you’ve been house hunting lately, you already know—it’s rough out there. Sky-high prices, limited inventory, and rising mortgage rates have made homeownership feel more like a pipe dream than the American dream. But here’s the good news: some states are actually doing something about it.
Realtor.com recently released its 2025 State-by-State Housing Report Card, and it offers a rare dose of clarity on where housing is getting more affordable—and where it’s headed in the opposite direction.
The report doesn’t just look at prices. It measures each state’s performance across affordability and homebuilding, offering a snapshot of which states are solving the housing crisis—and which are flunking out.
Let’s break down how the grades work, who made the honor roll, and why California, New York, and Massachusetts all got failing marks.
How the Housing Report Card Works
Before we dive into the rankings, here’s how Realtor.com scored each state. They used four key metrics:
- Affordability Score (25%) – How much of the for-sale inventory is affordable across different income levels.
- Income vs. Listing Price (25%) – Whether the median home is realistically affordable for the median household.
- Permit-to-Population Ratio (40%) – Is the state building enough new homes relative to its population size?
- New Construction Premium (10%) – Are the homes being built affordable, or just high-end luxury builds?
The final score is out of 100—and spoiler alert: no state earned an A+, and only one managed to snag a plain ol’ A.
The 10 Best States for Affordable Housing and Building
These ten states are leading the way, with the right mix of affordability, smart construction policy, and an actual plan to meet demand.
1. South Carolina (Score: 75.2, Grade: A)
This was the only state to earn a full A. South Carolina is building a lot of homes—and they’re not just McMansions. In fact, the median new build is actually cheaper than existing homes, which is nearly unheard of. That’s a win for buyers.
2. Iowa (Score: 71.6, Grade: A-)
Iowa came out on top in affordability. With a REALTORS® Affordability Score of 0.92, it’s the best in the country. Homes here are realistically priced for local incomes, even though construction is a bit slower.
3. Texas (Score: 71.5, Grade: A-)
Texas is an absolute construction powerhouse. It issued over 15% of all U.S. building permits in 2024—despite having just 9% of the population. The Lone Star State is doing its part, even if affordability is a bit strained in some metro areas.
4. Indiana (Score: 69.9, Grade: B+)
Affordable homes, strong permit activity, and a median list price under $300K? Indiana checks a lot of boxes and remains one of the most balanced housing markets.
5. North Carolina (Score: 68.8, Grade: B+)
Rapidly growing cities like Raleigh and Charlotte are leading the charge here. New construction is keeping up with demand, and the state has done a decent job of keeping prices within reason.
6. South Dakota (Score: 67, Grade: B)
Small but mighty. South Dakota ranks well in affordability and holds its own on new construction, especially considering its population.
7. Nebraska (Score: 66.7, Grade: B)
Nebraska is one of those under-the-radar states that quietly delivers. Homes are affordable, new builds are coming, and prices haven’t exploded like in coastal markets.
8. Arkansas (Score: 65.2, Grade: B)
Arkansas combines low home prices with decent construction activity. It’s not a flashy market, but for many buyers, that’s exactly the point.
9. Georgia (Score: 64.7, Grade: B)
The Peach State has seen a ton of growth, especially in suburban areas around Atlanta. Fortunately, builders are keeping up—helping to keep prices from getting out of hand.
10. Minnesota (Score: 62, Grade: B-)
Good incomes and a reasonable median home price give Minnesota a solid foundation. It’s not the most aggressive builder, but it’s making smart moves.
Why This Matters: States like these are not just reacting—they’re planning for the future. By making homes affordable today and building for tomorrow, they’re creating opportunities for middle-class families to actually buy in.
The States Falling Behind
On the other end of the spectrum, several states earned flat-out F grades, and their issues aren’t just about prices—they’re structural.
California
Despite being one of the biggest economies in the world, California earned a failing grade. Why?
- Low permit-to-population ratio
- Median home price of $756,000+
- High barriers to entry for developers
- Zoning restrictions that slow or block new housing
The state is building, sure—but not nearly enough. And when it does build, it’s often at the luxury end of the market.
Massachusetts
Massachusetts might take the crown for worst zoning complexity. Some cities have zoning codes over 1,000 pages long. Over 54% of land is zoned for single-family housing only—meaning starter homes and multifamily housing are practically outlawed in many areas.
New York, Rhode Island, Hawaii
These states also earned F’s due to sky-high costs, limited new construction, and restrictive land use laws that keep supply tight and prices even tighter.
Bottom line? Where building is hard, affordability suffers.
What This Means for Buyers and Policymakers
If you’re in the market to buy, this report might help guide your decisions.
- Live in a state like Iowa, South Carolina, or Texas? You may actually be able to find a home that fits your budget.
- In California or New York? Expect higher prices, fewer options, and longer timelines—unless serious policy shifts occur.
For policymakers, the message is clear: build more—and make it easier for people to do so.
- Cut red tape
- Embrace mixed-use and multifamily housing
- Incentivize affordable developments, not just high-end builds
The takeaway from Realtor.com’s report? The states doing well didn’t just luck into it—they’re making intentional decisions that support affordability and access.
Final Thoughts
Housing is local. There’s no one-size-fits-all solution, but this national report card makes one thing painfully obvious: some states are making homeownership possible again—and others are putting up roadblocks at every turn.
So ask yourself:
Did your state pass the test?
Is it helping families buy homes, or pushing them out?
If you’re looking to buy, relocate, or even just stay informed about your state’s housing efforts—this report is worth a read. And if your state flunked, maybe it’s time to ask local leaders: What are we doing to fix this?
Because if we’re serious about keeping the American Dream alive, we need to let America build!
