America’s latest real estate report card isn’t pretty

Ready for high school flashbacks? Real estate report cards are out, and whether you should pin yours on the fridge or bury it in a locker depends on where you live.

Among the 100 largest metros nationwide, only 10 earned A grades. And the valedictorian might surprise you: Des Moines, IA, where a median-priced home costs $349,903—requiring just 27.5% of the typical household’s income to cover, well below the 30% threshold considered affordable (assuming a 10% down payment and a 6.5% 30-year fixed mortgage).

Meanwhile, salutatorian Raleigh, NC, is crushing the construction test. New homes are going up faster than the city’s population would predict. All that supply means brand-new homes are actually cheaper than existing ones, which typically run $450,588.

“Homebuilding and affordability are inseparable, and if we want to improve affordability in a lasting way, we need to build more homes,” explains Realtor.com chief economist Danielle Hale. “The metros at the top of these rankings show that buyers benefit most when communities pair homes that are attainable with enough new construction to support tomorrow’s demand.”

City slackers

At the bottom of the class, 13 metros got Fs. Los Angeles came in dead last: The median list price is $1,129,415, and the monthly payment on that would eat up 84.4% of a typical local’s paycheck. Worse yet, the city is building only half the housing residents need. Other fails include New York City, Boston, Honolulu, and Providence, RI, among others.

Still, some of the F’s got extra credit: In California, Riverside, San Diego, San Jose, and Stockton posted strong homebuilding scores, which could get them back on track to graduate down the road.

These grades reveal clear regional patterns, with the South and Midwest leading the honor roll while the West and Northeast heading to summer school. They also show how local zoning can make or break a metro’s marks. “Beyond land availability, the biggest difference between the A and F metros is local housing policy,” explains Realtor.com senior economist Joel Berner. “The A’s share regulatory flexibility and streamlined approval processes, while the F’s are locked in restrictive land-use frameworks.”

Nowhere is that clearer than Boston vs. Austin, TX. Beantown has four times as many pages of zoning laws as Austin. Only 8% of Boston’s land allows lot sizes under 10,000 square feet, compared to 55% in Austin. And just 4% of Boston’s land permits ADUs versus 29% in Austin.

State policy plays a role, too. “One common thread among the A metros is that they tend to be blue cities in red states,” says Berner. Red states tend to have fewer building restrictions and environmental reviews, which can allow affordable housing to flourish in progressive enclaves. Austin’s Affordability Unlocked program, launched in 2019, waives height, unit count, and parking restrictions on projects with 50% or more income-restricted homes.

The lesson? No city is stuck with its GPA. If you rewrite the zoning laws, today’s F could be next year’s valedictorian.