The state of Indiana has grabbed America’s top housing market title, with New York hitting rock bottom, according to the second annual Realtor.com Affordability & Homebuilding Report Cards.
Indiana jumped from No. 4 to No. 1 and earned an A grade for keeping homes within reach of everyday earners while building at a healthy pace, Realtor.com said. Meanwhile, New York finished last at No. 51. It’s a state where a typical family has to spend more than half of its monthly income on mortgage payments in order to afford the median priced home, and it’s building half the new homes the state actually needs.
“A year ago, we launched this report to give policymakers a clear benchmark for progress at the state level,” said Danielle Hale, Chief Economist at Realtor.com. “What the 2026 update shows is that the states making real headway are the ones doing both things well — keeping homes within reach of today’s median earners and building enough new supply to meet demand. Indiana’s rise to the top of the class is a textbook example of that balanced approach. Meanwhile, the bottom of the rankings has barely budged, which shows how deep these structural challenges run. With a nationwide housing shortage still near 4 million homes, the gap between America’s best and toughest housing markets isn’t narrowing, it’s growing.”
Indiana grade of A (76.3) is the highest score in the nation.
Indiana Well Below 30% Threshold
A $295,810 median home price requires the typical household to spend just 28.3% of its monthly income on mortgage payments in Indiana, well below the 30% threshold that defines affordability.
The website noted that a Realtors Affordability Score of 0.89 ranks among the highest in the country. While Indiana doesn’t dominate any single metric, Realtor.com said it wins by doing everything well.
Per Realtor.com, the top five holds familiar names from last year’s inaugural rankings:
(2) Iowa (A, 75.8) holds strong as the nation’s affordability leader, with the lowest share of income required to purchase a median home (25.4%) and the highest Realtors Affordability Score (0.96) in the country.
(3) South Carolina (A, 75.2) remains the nation’s building champion with a permit-to-population ratio of 1.96, nearly double its population share, and a rare negative new construction premium, meaning newly built homes are actually 5.7% cheaper than existing ones.
(4) Texas (A-, 71.0) continues to lead all states in raw construction volume, accounting for 14.6% of all building permits issued, far above its 9.3% population share.
(5) North Carolina (B+, 68.6) mirrors South Carolina’s building success, with a permit-to-population ratio of 1.84 and a slightly negative new construction premium of -1.5%, meaning builders are delivering homes priced just below existing inventory.
The Regional Divide: Every A and B Grade Belongs to the South or Midwest
South and Midwest Shine
Realtor.com noted that a trend first identified in last year’s report has sharpened considerably: Every A and B grade belongs to a state in the South or Midwest.
Meanwhile, Southern states average a score of 60.4 (average rank: 16); Midwestern states average 60.9 (average rank: 16). Western states average 41.8 (average rank: 35). The Northeast averages just 30.0 (average rank: 43), and all six F grades went to states in those two regions alone.
Just 11 states can claim that a median-priced home is affordable to a median earner under the 30%-of-income rule, and all but one of them are in the South or Midwest.
“The regional divide we saw last year is a continuing structural feature of the American housing market,” said Joel Berner, Senior Economist of Realtor.com. “The states at the top of our rankings benefit from available land, lower regulatory barriers, and a building culture that prioritizes volume and accessibility. What’s particularly encouraging is seeing states like South Carolina and North Carolina deliver newly built homes that actually cost less than existing inventory. The challenge now is getting more states to replicate that model before the gap becomes impossible to close.”
Notable Climbs
Several states posted notable climbs in the 2026 rankings:
Delaware (+12 spots, No. 7, B) is one of this year’s most improved states, vaulting into the top 10 on the strength of above-average building activity (permit-to-population ratio of 1.46) and a strong median income of $87,667.
Utah (+12 spots, No. 17, C+) matches Delaware’s leap, driven by an exceptional permit-to-population ratio of 1.82, a clear sign that aggressive construction can improve a state’s trajectory even when current prices remain elevated.
Colorado (+9 spots, No. 18, C+) also climbed significantly, with a healthy permit-to-population ratio of 1.34 and a relatively contained new construction premium of 9.6%.
Kansas (+7 spots, No. 13, B) rose on the strength of its affordability numbers: a median priced home of $292,632 requires just 27.0% of median income, with a REALTORS® Affordability Score of 0.85.
On the other side, Realtor.com noted that Alabama, Maryland, and New Jersey each fell eight spots — the largest declines in the dataset — as building activity softened and affordability pressures mounted.
New York scores 8.5 out of 100, the lowest in the nation, and earned an F grade.
Realtor.com noted that a median listing price of $668,173 consumes 55.2% of a typical household’s income each year. New York’s permit-to-population ratio of 0.45 means it builds at less than half the rate its population share demands — and a 17% year-over-year permitting slowdown made it worse.
A 73.9% new construction premium confirms the homes being built are far out of reach for typical buyers.
