A surprising state leads Realtor.com's 2026 housing report card, as Midwest and Southern states pull further ahead of coastal markets on affordability and supply
Indiana has claimed the top spot in Realtor.com’s 2026 housing affordability rankings, overtaking South Carolina to earn an A grade.
The annual report cards rate all 50 states and Washington, D.C. on a 100-point scale. Each score splits equally between housing affordability and homebuilding activity.
No state earned an A+. Even top performers have room to improve.
@realtordotcom graded all 50 states and Washington, D.C. on housing affordability and new home construction, and the Midwest and South came out on top once again. Indiana earned the No. 1 spot, where a median-priced home of $295,810 costs about 28% of the typical household… pic.twitter.com/V5Jqf6wRoi
— Realtor.com (@realtordotcom) June 15, 2026
What Indiana got right on housing affordability
Indiana scored 76.3 out of 100, jumping from fourth place in 2025.
A median-priced home sits at $295,810. That requires 28.3 percent of the state’s median household income of $71,469, below the 30 percent affordability benchmark.
The state’s REALTORS Affordability Score of 0.89 ranks among the highest in the country.
On construction, Indiana’s permit-to-population ratio of 1.02 shows building is keeping pace with population share. The state produced more than 20,000 single-family units in 2025, up from around 12,000 a decade earlier.
Supply pressure remains, though. Young professionals moving in from Chicago and Louisville are absorbing new stock faster than they can be built.
“That’s the challenge putting upward pressure on a lot of our communities across the state on pricing, because there’s just not enough units in the ground for consumers to look at,” said Rick Wajda, CEO of the Indiana Builders Association.
Indiana Gov. Mike Braun signed Housing Bill 1001 in April 2026. The legislation rolls back restrictive local zoning rules to lower homeownership costs.
A $50 million Residential Infrastructure Fund, created in 2023, has also helped communities extend water, sewer, and road networks needed to open new land for development.
Mortgage professionals tracking the broader US housing affordability recovery will recognize Indiana’s profile: steady incomes, controlled regulation, and a building sector focused on entry-level demand.
Top 5 states for homebuilding and affordability in 2026
The table below shows the five top-ranked states, sourced from Realtor.com’s 2026 State Report Cards (June 15, 2026).
| Rank | State | Grade | Median listing price | Median household income |
|---|---|---|---|---|
| 1 | Indiana | A | $295,810 | $71,469 |
| 2 | Iowa | A | $282,886 | $75,991 |
| 3 | South Carolina | A | $363,896 | $67,758 |
| 4 | Texas | A- | $364,749 | $76,585 |
| 5 | North Carolina | B+ | $413,044 | $71,489 |
Source: Realtor.com 2026 State Report Cards, June 15, 2026.
Other top performers in the housing affordability rankings
Iowa held second place for a second consecutive year. It leads the nation in affordability. The typical Iowa household spends 25.4 percent of median income on a median-priced home — the lowest share across all 50 states and DC. Its REALTORS Affordability Score of 0.96 is the highest in the country.
Its weakness: a new-construction premium of 56 percent. Builders are skewing toward larger, pricier homes rather than entry-level stock.
South Carolina slipped from first to third. It still outperforms on construction, with a permit-to-population ratio of 1.96 — nearly double its population share. New homes there are priced 5.7 percent below existing listings.
Texas held fourth with an A-. It accounts for 14.6 percent of all US building permits despite a 9.3 percent population share. Affordability is its weak point. A median-income household must allocate more than 32 percent of earnings to afford a median-priced home.
Brokers advising clients in Texas markets will want to track ongoing builder sentiment headwinds in the new construction market.
Delaware was the standout climber, up 12 spots to seventh. A permit-to-population ratio of 1.46 and a median household income of $87,667 helped it crack the top 10.
Utah also rose 12 spots to 17th, driven by a permit-to-population ratio of 1.82. Affordability is a growing concern, with median listings approaching $590,000.
Coastal states continue to lag on housing affordability
The bottom of the rankings is largely unchanged from 2025. Six coastal states earned an F grade for the second consecutive year.
New York ranked dead last with a score of 8.5 out of 100.
A median listing price of $668,173 consumes 55.2 percent of typical household income. New York’s permit-to-population ratio of 0.45 means it builds at less than half the rate its population share demands. A 17 percent year-over-year permitting slowdown made it worse.
The other five F-grade states are:
- Massachusetts
- Rhode Island
- Hawaii
- California
- Connecticut
Five states fell sharply in the rankings. Alabama, Maryland, and New Jersey each dropped eight spots. Louisiana and Wisconsin slid seven. Weak permitting and sluggish construction were the common factors.
“This year’s refresh reveals a familiar regional divide, but also some notable shifts beneath the surface,” said Joel Berner, senior economist at Realtor.com.
For loan officers working buyers in high-cost states, elevated mortgage rates are expected to compound affordability pressure through the rest of 2026.
Where state policy keeps regulatory costs low and building activity high, purchase activity has more room to grow. Where it doesn’t, the housing affordability math stays broken for a large share of potential buyers.
For more on the forces shaping the US mortgage market, explore the latest from Mortgage Professional America’s market updates
