Coastal and Western states trail the rest of the nation when it comes to homebuilding and housing affordability—with New York ranking dead last this year.
The Empire State fared worst among all 50 states and the District of Columbia, earning an F grade in the 2026 Realtor.com® Housing Report Card released on Monday. It earned a startlingly low score of just 8.5 points out of 100 due to its sluggish construction and high costs.
Five other coastal states also received failing grades, with only slightly better scores on residential building and affordability: Massachusetts, Rhode Island, Hawaii, California, and Connecticut.
A further four states—Oregon, Montana, New Jersey, and New Hampshire—performed marginally better, earning grades ranging from D- to D+.
The leader this year was Indiana, which scored 76.3 points out of 100. The Hoosier State’s impressive affordability helped it earn an A grade.
The report card ranks every state and DC on a 100-point scale based on two categories: housing affordability and homebuilding.
Affordability, which accounts for 50% of the score, measures how accessible homeownership is for typical earners. It incorporates the REALTORS® Affordability Score and the share of a state’s median household income required to afford its median-priced home to calculate the financial burden on buyers.
The remaining half of the score is determined by homebuilding activity, which assesses whether a state produces enough new homes to meet demand. It is based on the permit-to-population ratio and the new-construction premium—the price gap between purchasing a brand-new home versus an existing home.
Realtor.com senior economist Joel Berner says the states occupying the bottom of the ranking all share the same challenges, albeit with some local variations: restrictive zoning regulations, a shortage of buildable land, and construction costs far exceeding the budgets of middle-income buyers.
Empire State fails on construction, affordability
Since last year, New York has slid from the 49th to the 51st spot in the rankings. In 2026, a local household earning a median income would have to spend more than 55% of that income to afford a median-priced home of $668,173, leaving them severely cost-burdened.
On the construction side, New York’s permit-to-population ratio stands at a paltry 0.45. This means that building permits are less than half of what the state’s population share would suggest.
And when new homes are built, they are priced too high to meaningfully improve affordability: The typical new development in New York carries an eye-popping premium of nearly 74% relative to an existing home.
“One of the biggest challenges facing New York is the amount of time it takes to move a housing project from land acquisition to construction and occupancy,” Michael Fazio, executive director of the New York State Builders Association, tells Realtor.com. “The development approval, environmental review, permitting, and inspection processes can often take years before a project is completed and families can move into a home.”
Fazio explains that, taken together, these delays add significant costs to each project that ultimately get passed on to homebuyers and renters, eroding the state’s affordability.
The red tape, coupled with NIMBY (“not in my backyard”) opposition to multifamily construction from local homeowners, has historically stifled local housing production.
“Developers, builders, and investors want to put their capital to work to create housing and strengthen communities across New York,” notes Fazio. “When projects are delayed by years due to regulatory hurdles, uncertainty, or lengthy approval processes, it creates significant frustration and increases costs.”
What New York desperately needs, according to Fazio, is a regulatory environment that encourages investment and residential building rather than imposing unnecessary hurdles.
Despite New York’s dismal performance on the report card, Fazio argues that the state, under the leadership of Gov. Kathy Hochul, has taken meaningful steps to address the housing shortage. Enacted this year were State Environmental Quality Review Act reforms aimed at streamlining environmental reviews and reducing delays for housing and infrastructure projects.
“Housing affordability cannot be solved without increasing supply, and that requires making it easier to build,” says Fazio.
New York is also making strides by leveraging recent court rulings that rein in the state’s wetland protections, potentially opening up land for residential construction. Additionally, it is advancing an energy strategy that balances environmental mandates with affordability.
Looking ahead, the chief of the builders association says he is feeling optimistic because he argues that stakeholders across government, industry, and local communities are increasingly recognizing that housing affordability is “one of the defining issues of our time.”
“There is a growing understanding that we simply need more housing of every type and at every price point,” maintains Fazio. “While challenges remain, recent policy reforms and the broader conversation around housing give me confidence that New York is moving in the right direction.”
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Energy codes stall Bay State housing
Massachusetts, which has not budged from its No. 50 rank from last year, faces some of the same challenges as New York—and an even slower pace of new construction.
Michael Travaline, chair of the Home Builders and Remodelers Association of Massachusetts’ government affairs committee, says that strict energy codes, high affordability requirements, restrictive zoning bylaws, and a myriad of town approval processes are collectively to blame for the state’s poor record on new construction and affordability.
Travaline explains that there are currently three separate energy codes in Massachusetts, and the strictest of all, the Specialized Opt-In code, adds substantial costs to all residential projects.
To incentivize developers and boost the pace of construction, Travaline argues that lawmakers should have every municipality in the state follow the same code and exempt residential housing projects from the Specialized Opt-In requirements.
Other ideas include ensuring that cities and towns continue to implement zoning reforms to allow for more development, including through incentives like additional funding and grants.
Travaline notes that there are reasons to be optimistic about the future of housing in Massachusetts, including recent legislative action to spur construction, such as the MBTA Communities Act and the Affordable Homes Act.
The MBTA legislation, which requires 177 municipalities served by public transit to create zoning districts allowing multifamily housing, is projected to add over 40,000 new residential units to the state’s housing supply, while the Affordable Homes Act, spearheaded by Gov. Maura Healey, aims to unlock 220,000 additional units.
“The key stakeholders in the housing industry and political world understand that we are in the middle of a housing crisis and that we need to urgently find solutions that will allow Massachusetts to become more affordable,” he says.
However, there is a looming battle over rent control in the state that Travaline worries could undermine housing production.
“Voters will decide in November whether to implement the strictest rent control policy in the country,” says Travaline. “This would absolutely decimate housing production and have numerous negative effects on the Massachusetts housing market.”
For the struggling states, Berner says a path toward progress on homebuilding and affordability exists, but change won’t happen overnight.
“A single year of data is unlikely to alter any of these in a meaningful way,” concludes the economist. “That doesn’t mean that they can’t improve, but the gaps these states have to cover will require several years of consistent improvement to register.”
