The States Defying America’s Housing Crisis

A majority of Americans still believe homeownership feels out of reach today, as housing costs have skyrocketed since the pandemic without showing any signs of decreasing. However, in one region of the country, the dream of owning a home remains attainable, according to a new analysis by Newsweek. The Midwest dominates a list of states where homeownership is most within reach, accounting for eight of the top ten states in the American Dream Index.

This index evaluates 33,772 U.S. ZIP codes through six critical factors, including housing access, and assigns a score ranging from 0 to 100, answering the question of whether a household with a typical income can afford to live there.

To calculate the housing access score, Newsweek used the median home value-to-income ratio, gross rent as a share of income, and owner-occupancy rate. Only one Southern state and one Northeastern state made the top ten list, highlighting a growing divide between America's affordable interior and its increasingly expensive coasts.

According to Chen Zhao, Redfin's head of economic research, the Midwest's affordability stems from low demand due to limited job opportunities, making these areas more affordable compared to other regions.

Despite the overall rise in home prices across the country since 2019, the Midwest remained relatively affordable due to its lower popularity among Americans. In June 2026, median sale prices in Midwestern states like Iowa, Indiana, Kansas, and Ohio were significantly lower than in many Northeastern and Western states, where prices often exceeded $400,000 and reached up to $700,000 in some areas, according to Redfin data.

Even though home prices have been climbing rapidly in many regions, they started from a much lower base compared to coastal markets. For instance, home prices in Iowa, Nebraska, Kansas, and Ohio were still well below the levels seen in many parts of the Northeast and West.

The disparity in home prices between the Midwest and other regions is further exacerbated by limited home building. Coastal West and Northeast markets, fueled by high demand and limited inventory, have driven up prices due to decades of underbuilding relative to job and population growth, as noted by Hannah Jones, a senior economist at Realtor.com.

These regions are anchored by dense, high-wage economic hubs, attracting a steady stream of high earners who bid up prices for renters and lower-income buyers competing for limited housing stock. In contrast, many Midwestern metros have more geographic flexibility for expansion, enabling them to handle demand better than coastal regions.

The South and West have outpaced the Midwest in terms of building permits and new home availability, contributing to a more acute housing shortage in these areas.