A new Realtor.com report released this week evaluated the 100 largest U.S. metro areas for housing affordability and the pace of new home construction, providing a comprehensive look at both current market conditions and future prospects [1]. Des Moines, Iowa, received the highest grade (A+), followed by Raleigh, North Carolina; Columbia, South Carolina; Houston, Texas; and Indianapolis, Indiana. In contrast, Los Angeles ranked last with an F, followed by Providence, Rhode Island; New York City; Honolulu; and Boston [1].
The report highlights a persistent housing shortage in the U.S., estimated at more than 4 million homes, attributed to years of underbuilding [1]. Joel Berner, senior economist at Realtor.com, noted that builders are facing increased costs for materials, labor, and regulation, while high mortgage rates and low buyer affordability are depressing demand [1].
Berner emphasized that the highest-ranked metros benefit from local governments that facilitate new housing projects through less restrictive zoning laws and faster permitting processes. These cities also have strong job markets and abundant land, enabling builders to meet growing demand by constructing both dense urban and suburban housing developments [1].
For cities aiming to improve affordability, Berner recommended revisiting local zoning ordinances to remove barriers to new construction [1].
CONCLUSION
The Realtor.com report underscores significant regional disparities in housing affordability, with Midwest and Sun Belt cities leading the rankings due to supportive local policies and abundant land. Coastal cities continue to struggle with affordability, exacerbated by regulatory hurdles and limited space. The findings suggest that policy reforms, particularly around zoning, could play a crucial role in addressing the ongoing housing shortage.