Indiana knocked off last year's leader to claim the top spot in Realtor.com's 2026 housing report cards, which graded all 50 states and the District of Columbia on affordability and homebuilding activity. The Hoosier State earned an A and a total score of 76.3 on a 100-point scale, the highest mark in the country but still short of an A+, a grade no state managed to earn.
The broader pattern is hard to miss. Twelve of the 13 states with the highest grades sit in the Midwest and South, regions where lower taxes, lighter regulation, and a willingness to build have kept housing within reach for working families. The states at the bottom of the list, New York, Massachusetts, Rhode Island, Hawaii, California, and Connecticut, all received F grades. Every one of them is governed or heavily shaped by progressive policy frameworks that have made building new homes slower, costlier, or both.
Realtor.com senior economist Joel Berner framed the results in diplomatic terms:
"This year's refresh reveals a familiar regional divide, but also some notable shifts beneath the surface, with a new state at the top of the class and a handful of states whose grades moved dramatically in either direction."
A familiar divide, indeed. And one that tells taxpayers something their elected officials in Albany and Sacramento would rather not discuss.
Half of each state's grade rests on an affordability measure. The other half is based on homebuilding activity. The report uses 30% of median household income as the benchmark for housing affordability, the traditional threshold most lenders and housing economists treat as the line between manageable and strained.
Indiana clears that bar comfortably. Its median-priced home sits at $295,810, and its median household income is $71,469. That means a median-priced home in Indiana requires roughly 28% of median household income, below the 30% threshold. Indiana climbed three spots from last year's rankings to reach the top.
Iowa, the other A-grade state, posted a median listing price of $282,886 against a median household income of $75,991. South Carolina, last year's leader, held an A grade as well, with a median listing price of $363,896 and a median income of $67,758.
Texas rounded out the top four with an A- grade, a median listing price of $364,749, and a median income of $76,585. North Carolina and Nebraska each earned a B+.
New York ranked dead last. Its median listing price of $668,173 dwarfs its median household income of $82,657, a ratio that puts homeownership far out of reach for a typical family. Massachusetts, Rhode Island, Hawaii, California, and Connecticut joined New York in the F tier.
None of this is accidental. These states share common features: extensive permitting requirements, environmental review layers that can delay projects for years, restrictive zoning codes that limit new construction, and high tax burdens that raise costs at every stage of the building process. The result is a housing market that punishes the very people progressive leaders claim to champion, young families, first-time buyers, and middle-income workers.
The report found that most states near the bottom saw their rankings hold steady or change little from a year ago. In other words, the states failing their residents on housing are not getting better. They are stuck.
Delaware and Utah were the year's biggest climbers, each vaulting 12 spots. Delaware surged from 19th to 7th. Utah rose from 29th to 17th. Both states earned credit for expanded homebuilding activity that pushed their grades higher.
The biggest drops belonged to Alabama, Maryland, and New Jersey, each falling eight spots. Alabama slid from 13th to 21st and now holds a C grade. Maryland dropped from 23rd to 31st, also earning a C. New Jersey tumbled from 35th to 43rd and received a D, putting it closer to the F tier than to the national middle.
New Jersey's slide is worth watching. The state already carries one of the highest property-tax burdens in the country. A D grade on housing affordability and building activity suggests the squeeze on Garden State families is tightening, not easing.
Beyond the headliners, the full roster of grades paints a clear regional portrait. Arkansas, Delaware, Florida, Georgia, Kansas, Oklahoma, and South Dakota each earned a B. Colorado, Minnesota, Ohio, Utah, and Virginia received a C+. A thick band of C-grade states includes Alabama, Arizona, Idaho, Illinois, Kentucky, Louisiana, Maryland, Michigan, Missouri, North Dakota, Pennsylvania, Tennessee, West Virginia, and Wisconsin.
States earning a C- include Alaska, Maine, Mississippi, Nevada, New Mexico, Washington, and Wyoming. The D tier holds Montana and New Jersey, while the District of Columbia, New Hampshire, and Vermont each received a D+. Oregon landed a D-.
The pattern holds across hundreds of data points. States that build more homes and keep costs manageable grade well. States that restrict supply and layer on regulatory costs do not.
The 30% affordability benchmark is not an abstract concept. It is the line between a family that can save, invest, and weather a bad month, and a family that is one car repair away from missing a mortgage payment. When a state's median home price demands far more than 30% of median income, the math forces families into longer commutes, smaller spaces, or permanent renting.
In Indiana, the math works. In New York, it does not, and hasn't for years.
The gap between Indiana's $295,810 median listing price and New York's $668,173 is not just a number. It represents the difference between a young couple buying their first home and that same couple paying rent indefinitely in a market rigged against them by decades of regulatory accumulation.
Berner called the regional divide "familiar," and he is right. The Midwest and South have dominated these rankings before. But familiarity should not breed complacency, or acceptance. The divide persists because the policy choices that drive it persist.
States that welcome homebuilders, streamline permitting, and keep taxes reasonable produce affordable housing. States that treat every new subdivision as an environmental crisis, every zoning variance as a political fight, and every permit application as a revenue opportunity produce housing shortages and sky-high prices.
No state earned an A+. Even the best performers have room to improve. But the distance between Indiana's A and New York's F is not a mystery. It is a consequence.
The six states that flunked Realtor.com's report card can study the answers all they want. Until they change the policies that produced the failing grades, the results will stay the same, and the families priced out of homeownership will keep moving to states that actually let people build.