America is in a housing crisis. The supply of houses is limited. The supply of affordable housing is even tighter, and persistently high mortgage rates make matters worse. But the extent of the problem varies from state to state.
This is why companies consider the local residential real estate market when deciding where to locate. They want their prospective employees to be able to find an affordable place to live that is also a good investment. This makes the housing market an important element of the competitiveness of state-owned enterprises.
CNBC considers the housing market as part of the Economy category in America’s Top States for Business, its annual ranking of all 50 states. Under this year’s methodology, states are scored based on this balance of affordability and value. We consider price appreciation and seller profits, as well as affordability, inventory and housing starts. We also look for signs of stress, such as foreclosure activity and underwater mortgages.
While every buyer and seller has different priorities, home shopping in these ten states could give you the best bang for your buck.
10. Delaware
Aerial photos of luxury homes in Brookside Delaware, USA
Felixmizioznikov | Istock | Getty Images
Housing affordability is about average in the First State, but your housing dollar in Delaware gets a big boost from very low property taxes. Delaware homeowners paid an effective tax rate of less than half a percent, according to real estate data firm ATOM. This is the fourth lowest in the country.
Economy ranking 2024: No. 10 (Top States Rating: B-)
Assessment: 4.73%
Inventory (July): 2 months
Affordability rating (0 to 2, with 2 being more accessible): 0.56
Actual property tax rate: 0.43%
Average selling price: $360,700
9. Indiana
Exterior of ranch house in a neighborhood in Indiana, Midwest, USA
Wanderluster | Istock | Getty Images
The Hoosier State offers a rare combination of affordability, including low property taxes, as well as healthy price appreciation. Inventory remains tight, but Indiana home buyers are still finding what they’re looking for at an attractive price.
Economy ranking 2024: No. 19 (Top States Rating: C)
Assessment: 8.02%
Inventory (July): 2 months
Affordability Score: 0.81
Actual property tax rate: 0.86%
Average selling price: $265,300
8. Agriculture
A sign outside a house for sale in Atlanta, Georgia, USA
Elijah Nouvelage | Bloomberg | Getty Images
Home inventories are building in The Peach State, which bodes well for affordability. The builders were also active. However, price appreciation remains healthy.
Economy ranking 2024: No. 7 (Top States Rating: B)
Assessment: 7.16%
Inventory (July): 3 months
Affordability Score: 0.59
Actual property tax rate: 0.82%
Average selling price: $385,600
7. Tennessee
Cynthia Holzapfel gestures as she describes the downstairs unit of her home in Summertown, Tennessee on June 15, 2024. Cynthia Holzapfel rents out the downstairs unit to families of all ages.
Kevin Wurm | The Washington Post | Getty Images
Despite some of the lowest property taxes in the country, affordability is an issue in The Volunteer State. A new law includes incentives for more affordable housing in high-rise buildings. In the single family market, inventory has started to build, which has moderated price gains and could bring more buyers into the market.
Economy ranking 2024: No. 3 (Top States Rating: B+)
Assessment: 6.24%
Inventory (July): 3 months
Affordability Score: 0.49
Actual property tax rate: 0.44%
Average selling price: $393,000
6. Nevada
A contractor works on a home under construction in the Southern Highlands community of Versilia in this aerial photo taken above Las Vegas, Nevada, USA
Roger Kisby | Bloomberg | Getty Images
The Silver State’s housing market is historically volatile, and this year is no exception. But inventory is manageable and housing construction is active. While affordability is still an issue, prices have moderated — good for buyers, not sellers. Property taxes are low. Home equity is healthy despite an uptick in foreclosure activity.
Economy ranking 2024: No. 8 (Top States Rating: B)
Assessment: 3.39%
Inventory (July): 2 months
Affordability Score: 0.43%
Actual property tax rate: 0.48%
Average selling price: $458,300
5. New Jersey
Island community of New Jersey beach town in Barnegat Bay.
Johnrob | E+ | Getty Images
Home prices rose in The Garden State last year as the housing market remains active. Affordability could be better, but it’s not the opposite of middle income. However, New Jersey has the second highest property taxes in the nation after Illinois and a high foreclosure rate.
Economy ranking 2024: No. 17 (Top States Rating: C+)
Assessment: 11.38%
Inventory (July): 2 months
Affordability Score: 0.56
Actual property tax rate: 1.64%
Average selling price: $532,400
4. North Carolina
Workers build houses in Lillington, North Carolina, USA
Alison Joyce | Bloomberg | Getty Images
Builders are busy in The Tar Heel State, with the second-highest housing starts last year behind fast-growing Alabama. But inventory is still tight enough to keep price appreciation strong. Property taxes are reasonable, especially considering the state’s rapid growth.
Economy ranking 2024: No. 4 (Top States Rating: B+)
Assessment: 6.98%
Inventory (July): 2 months
Affordability Score: 0.52
Actual property tax rate: 0.6%
Average selling price: $383,700
3. Arizona
A for sale sign outside a mobile home at Coyote Ranch in Yuma, Arizona on Friday, March 9, 2024.
The Washington Post | Getty Images
Sellers continue to make decent profits in The Grand Canyon State, even as housing inventory rises. Construction activity is strong and housing equity is healthy. Property taxes are low, but so is housing affordability.
Economy ranking 2024: No. 5 (Top States Grade: B+)
Assessment: 6.63%
Inventory (July): 3 months
Affordability Score: 0.44
Actual property tax rate: 0.41%
Average selling price: $450,800
2. South Carolina
Homes in the Nexton community in Summerville, South Carolina, USA
Sam Wolfe | Bloomberg | Getty Images
Home prices are rising in the Palmetto State, but housing remains relatively affordable. This price appreciation can bring more construction activity, which is one reason inventory levels are rising. Property taxes are low. However, home equity could be better and foreclosures are high.
Economy ranking 2024: No. 12 (Top States Rating: B-)
Assessment: 9.42%
Inventory (July): 3 months
Affordability Score: 0.61
Actual property tax rate: 0.5%
Average selling price: $387,700
1. Florida
View of Duval Street in Key West, United States on May 7, 2024.
Jakub Porzycki | Nurphoto | Getty Images
Gauging the Sunshine State’s housing market is very difficult, but this much we know: home values are appreciating and homebuilders are busy trying to meet demand as new residents pour into the state. Property taxes, while not the lowest, help offset the state’s ongoing affordability issues. Some trends are more alarming, such as rising foreclosures and the growing number of subprime mortgages.
The state is also trying to claw its way out of a severe insurance crisis that is having significant effects on home values and affordability. The risk to Florida’s climate — including the risk to housing stock — is real. However, for now, Florida’s real estate market is striking a decent, albeit tenuous, balance, and that’s helping bolster the nation’s stronger overall economy.
Economy ranking 2024: No. 1 (Top States Rating: A+)
Assessment: 6.85%
Inventory (July): 4 months
Affordability Score: 0.44
Actual property tax rate: 0.76%
Average selling price: $420,100
