New Housing Supply is Thriving in These States

States across the South and Midwest are doing two things right when it comes to housing: offering attainable price points and building new homes at a healthy pace. Real estate marketing platform Realtor.com recently released its second annual Affordability and Home Building Report Cards, which ranks states and assigns them letter grades based on these measures.

This year, Indiana was ranked first place, earning an A grade for its $295,810 median home price, which requires the typical household to spend just 28.3% of its monthly income on mortgage payments. Meanwhile, New York—where a typical family has to spend more than half of its monthly income on mortgage payments and new-home supply is low—finished in last place.

Which other states received high grades?

Iowa and South Carolina followed closely behind Indiana with A grades. According to the report, Iowa leads in affordability, with just 25.4% of a typical household’s income required to afford a mortgage. At the same time, South Carolina has a permit-to-population ratio of 1.96, nearly double its population share, and a negative new construction premium, which means new homes in South Carolina are 5.7% cheaper than existing ones.

Texas and North Carolina rounded out the top five spots, with respective grades of A- and B+. Both states have seen a surge in new-construction volume, but especially Texas, which accounts for 14.6% of all building permits issued.