Realtor.com handed out report cards to U.S. states on Thursday, ranking each state on its combination of housing affordability and new construction activity. There were more F’s than A’s, suggesting that much of the country is falling behind in its response to the nation’s housing crisis.
South Carolina was the only state to receive an A grade in Realtor.com’s rankings. The real estate listings company noted that a typical new home in South Carolina is priced 8.2% lower than the median existing home on the market. Nationwide, the opposite is true, with the median sales price for new homes 3.4% higher than the median price for existing homes last year, according to Realtor.com.
Overall, 13 states received a B- or better and 30 states (including the District of Columbia) were in the C+ to C- range.
Iowa and Texas each received A- marks, while Indiana and North Carolina each got a B+ grade. The company found that Iowa slightly underperforms in construction permit activity, and new homes in Iowa cost 58% more than existing homes. But the median list price in the Hawkeye State of $294,600 is about four times the state’s median annual salary of $73,122 — the lowest ratio among all states.
On the other end of the grading scale, seven states received failing marks, including three in the Northeast: Rhode Island, Massachusetts and New York.
A supplemental analysis to the Realtor.com report included a statement from Michael Fazio, executive director of the New York State Builders Association, who bemoaned the current housing situation in the Empire State.
“We need housing terribly. In this state, it’s really at a crisis point, and everybody talks about it, but we need to be doing more to address it,” Fazio said. “Red tape and regulations are a major impediment — that’s a major obstacle to building housing.”
Realtor.com also quoted Dan Dunmoyer, president and CEO of the California Building Industry Association, whose home state also received an F on the company’s report card.
“If California is serious about solving its housing crisis, we need a legal and regulatory system that supports — not stifles — homebuilding,” Dunmoyer said. “That means [environmental regulation] reform, streamlined permitting and more flexible land-use policies.”
The report observed that no A+ grades were given, “which says a lot about how far we still have to go to make homeownership truly attainable.” Realtor.com advocated for zoning policy reform to make it easier for home builders to increase the supply of housing stock.
“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,” the report stated.
