The housing markets offering loan originators the strongest potential purchase conditions are not necessarily those with the lowest home prices. They are the markets where local incomes, home prices, and new construction are moving in something close to balance.
Des Moines, Iowa, and Raleigh, North Carolina, led Realtor.com’s first Metro Affordability & Homebuilding Report Cards, which ranked the 100 largest U.S. metropolitan areas using measures of current affordability and residential construction.
Ten metros received grades in the A range. Most are in the Midwest and South, where Realtor.com found comparatively attainable home prices and stronger construction activity. Thirteen metros received failing grades, including several of the country’s largest and most expensive coastal markets.
Des Moines ranked first with an A+ and an overall score of 83.4. Raleigh followed with an A+ and a score of 82.8. Columbia, South Carolina; Houston; and Indianapolis completed the top five.
Los Angeles ranked last with a score of 12.0. Providence, Rhode Island, ranked No. 99, followed by New York at No. 98.
For LOs, the rankings illustrate why lower mortgage rates alone may not produce the same purchase opportunity in every market. Borrowers also need homes they can afford to buy.
Des Moines Leads On Affordability And Supply
Des Moines combined an affordability-component score of 88.3 with a homebuilding score of 78.4.
The metro’s median listing price was $349,903, according to the report. Realtor.com calculated that the mortgage payment on that home would require 27.5% of the median household income, below the commonly used 30% affordability threshold.
Des Moines also had a permit-to-population ratio of 1.85. That means the metro permitted 85% more homes than would be expected based on its share of the national population and the overall level of U.S. permitting.
Its weakness was the cost of new construction. Newly built homes carried a 23.4% premium over existing homes, placing Des Moines in the lower half of the metros studied on that measure.
Raleigh’s second-place ranking was driven more heavily by construction. Its permit-to-population ratio was 2.51, while newly built homes were priced 1.3% below existing homes.
Other metros receiving A-range grades were Columbia, Houston, Indianapolis, Austin, Jacksonville, Oklahoma City, Palm Bay, and Columbus.
“Homebuilding and affordability are inseparable,” Realtor.com Chief Economist Danielle Hale said, adding that lasting affordability improvements require more construction.
Los Angeles Lands At The Bottom
Los Angeles received an affordability-component score of 0.9 and a homebuilding score of 23.1, placing it last among the 100 metros.
The metro’s median listing price was $1,129,415. Based on a 10% down payment and a 6.5% rate on a 30-year fixed mortgage, Realtor.com calculated that the monthly payment would consume 84.4% of the median earner’s income.
A buyer would need to make a down payment of approximately 68%, or about $768,000, to bring that payment down to the report’s 30% affordability threshold.
Los Angeles also recorded a permit-to-population ratio of 0.47, meaning it permitted less than half the national average number of homes per resident.
The other failing markets were Providence; New York; Honolulu; Boston; Oxnard-Thousand Oaks-Ventura, California; San Francisco; Worcester, Massachusetts; San Diego; Stockton, California; San Jose; Miami; and Riverside, California.
Some of those metros performed better on construction than on current affordability. Riverside’s homebuilding score reached 50.5, for example, while its affordability-component score was only 9.2.
Affordable Existing Homes Do Not Always Mean Affordable New Homes
The underlying data also show that an affordable existing-home market does not necessarily offer borrowers a comparable selection of newly built homes.
Pittsburgh had a median listing price of $245,217 and one of the report’s strongest affordability scores, but its new-construction premium was 109%. The premium was 92.6% in Akron, Ohio; 119.5% in Toledo, Ohio; 102.8% in Cleveland; and 143.3% in Detroit.
By contrast, several faster-building markets offered new homes at prices close to or below those of existing homes. New-construction premiums were negative in Raleigh, Austin, Palm Bay, Cape Coral, North Port, Charleston, Boise, Phoenix, Greenville, and Lakeland.
What It Means
The report suggests that the potential benefit of lower mortgage rates will vary substantially by market.
A rate decline can increase purchasing power, but it cannot create inventory. Metros pairing stronger construction with relatively attainable prices may be better positioned to convert improved affordability into purchase volume. In high-cost markets with limited permitting, lower rates could bring some buyers back without resolving the shortage of homes available within their budgets.
The report also points to a more complicated opportunity in markets where existing homes remain affordable, but new construction carries a large premium. Originators working in those areas may find purchase opportunities concentrated in older housing stock rather than builder pipelines.
Realtor.com based the rankings primarily on 2025 listing, household-income, population, and building-permit data. Each metro’s score was divided equally between affordability and homebuilding.
The affordability component considered the income required to pay for a median-priced home and the share of listings affordable to households at different income levels. The homebuilding component was based primarily on permits relative to population, along with the price difference between newly built and existing homes.
The rankings therefore measure the structural balance between affordability and supply rather than current mortgage demand or real-time origination volume.
