A housing report from Realtor.com evaluates all 50 states on a 100-point scale, balancing housing affordability with local homebuilding activity. The findings show that a household earning the median income can comfortably afford a median-priced home in only 11 states.
The Midwest is heavily driving this baseline housing accessibility, with our region claiming the top spots for pure affordability:
- Iowa (No. 1 in Affordability): Requires homebuyers to spend just 25.4% of their earnings on a median-priced home.
- Illinois (No. 2 in Affordability): Right behind Iowa, with the median-priced home taking up just 26.0% of median household income.
- Indiana (No. 1 Overall Report Card): While fifth in pure affordability (28.3%), Indiana took the top overall rank on the report card due to its steady inventory growth and building pace.
Two Key Insights for Rockford Builders
While Illinois’ second-place affordability ranking makes our state highly attractive to budget-conscious buyers, the data highlights two structural trends for our local building community:
- The New Construction Price Premium: In top-ranked Iowa, new construction carries a staggering 56% price premium over existing homes. For Rockford-area builders, managing this cost gap is essential to help make sure new builds remain within reach of regional wages.
- The Permitting Deficit: Economists project that 9 of the 11 affordable states will lose their budget-friendly status because residential construction is failing to keep pace with demand. Currently, only Iowa and Indiana are issuing enough permits to protect their baseline affordability long-term.
The Takeaway: Illinois has a major affordability advantage, but sustaining it requires inventory. For local associations, the focus remains on reducing development friction and accelerating permitting to keep our region from slipping into a structural supply shortage.