Report cards can be nerve-racking for students at this time of year. But students aren’t alone — Realtor.com is making it stressful for states as well.
The real estate site released its second annual rankings on Monday, evaluating states on housing affordability and home building activity. Indiana, Iowa and South Carolina were the only states to earn A grades, while six coastal states were given failing scores for the second year in a row. Texas received an A-minus.
Indiana earned the highest score with 76.3, after finishing fourth in 2025. Realtor.com reported the Hoosier State “doesn’t dominate any single metric, instead it wins by doing everything well.”
The median home price in Indiana of $295,810 allows the typical household to spend 28.3% of its monthly income on mortgage payments, putting it “well under the 30% threshold that defines affordability,” Realtor.com stated in its report.
An affordability score of 0.89 in Indiana — which measures how many listings are affordable to households at different income percentiles — also placed it among top states.
Iowa, which earned the top state designation in 2025, earned an overall 75.8 score, which was good enough for second place in the annual rankings. With the nation’s lowest share of income required to purchase a median-priced home at 25.4%, Iowa had an affordability score of 0.96, the highest in the country.
New York landed at the bottom of the rankings, scoring just 8.5 overall with an affordability score of 0.51. Massachusetts, Rhode Island, Hawaii, California and Connecticut were the other states with failing scores. Oregon, which had failed in 2025, barely passed with a D-minus ranking.
States in the South and Midwest were the only ones to receive A and B grades. Twenty-six states received C grades, and six received D grades.
Danielle Hale, chief economist at Realtor.com, explained the highest-graded states are the ones “making real headway” at keeping homes within reach of today’s median earners while adding 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,” Hale noted in commentary accompanying the report. “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.”
Some states made significant improvements over their 2025 numbers, however.
Delaware rose 12 spots due to what Realtor.com called “above-average building activity” (permit-to-population ratio of 1.46) and a strong median income of $87,667.
Utah also improved by 12 places, with its improvement “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,” stated the report.
Colorado climbed nine spots due to its “healthy permit-to-population ratio of 1.34 and a relatively contained new construction premium of 9.6%.” And Kansas rose seven places on the strength of its affordability numbers to earn a B grade.
“The regional divide we saw last year is a continuing structural feature of the American housing market,” commented Joel Berner, senior economist at 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.”
Berner added that it is particularly encouraging to see states like South Carolina and North Carolina “deliver newly built homes that actually cost less than existing inventory,” though he said the challenge now is “getting more states to replicate that model before the gap becomes impossible to close.”
