Many Americans feel that owning a home is increasingly unattainable, primarily because housing costs have surged dramatically since the pandemic and show little sign of declining. Yet, in one U.S. region, the dream of homeownership persists. The Midwest stands out as a place where housing remains accessible. Newsweek’s analysis reveals that eight of the top ten states with affordable homeownership possibilities are located in the Midwest.
American Dream Index Analysis
Newsweek developed the American Dream Index, assessing all 33,772 U.S. ZIP codes through six crucial opportunity pillars, including housing access. Each location received a score from 0 to 100, measuring how feasible it is for a typical household to afford living there. This index relied on publicly available, free data and combined factors such as median home value-to-income ratio, gross rent as a percentage of income, and owner-occupancy rate to evaluate housing access.
Regional Differences in Affordability
The analysis indicated that only one Southern and one Northeastern state ranked among the top 10 affordable states, highlighting a divide between America’s interior and coastal areas.
Top 10 Most Affordable States
- Iowa: 52.0
- West Virginia: 51.6
- South Dakota: 49.6
- Indiana: 48.8
- Kansas: 48.7
- Michigan: 48.4
- Nebraska: 48.0
- Missouri: 47.7
- Maine: 47.4
- Ohio: 47.4
States with Lower Housing Access Scores
States with lower scores are predominantly on the West and East coasts, with some exceptions:
- District of Columbia: 12.5
- Hawaii: 16.2
- California: 16.6
- Nevada: 26.2
- New York: 26.8
- Oregon: 28.4
- Massachusetts: 30.1
- Washington: 30.5
- Colorado: 31.2
- Florida: 32.2
Midwest’s Affordable Housing
The Midwest remains affordable mainly due to lower demand, explains Chen Zhao, Redfin’s economic research head. Fewer individuals want to reside there because of limited job opportunities, keeping the area more affordable.
The Midwest avoided the soaring home prices seen in the South, where remote work prompted a buying frenzy. Consequently, their already lower home prices remained affordable. Although prices rose here too, they started from a lower base than coastal regions. As of June 2026, median prices in cities like Iowa, Indiana, Kansas, and Ohio remain below $400,000. In contrast, states in the Northeast and West often exceed these prices.
Coastal Housing Challenges
Hannah Jones, senior economist at Realtor.com, notes that high prices in the coastal West and Northeast stem from their popularity with buyers and a lack of inventory. These regions are hubs of high-wage employers in tech, finance, and government, attracting high earners who drive up home prices.
Geographic constraints limit West and Northeast cities, unlike the Midwestern markets, which can expand outward more easily. Strict zoning and land-use regulations exacerbate the housing shortage in these regions.
Although the South and West outpace the Midwest in building permits and new home availability, the Midwest’s lower demand results in a more balanced market. This relative affordability represents one of the few places where buyers can secure a home without six-figure premiums.
Housing Market Trends
While the Midwest offers affordability, it does not guarantee buyer interest. Nationwide, home sales fell by 2.4% in June, but rose by 2.8% year-over-year. In the Northeast, sales remained stable, with increases elsewhere: Midwest at 2.1%, South at 3.8%, and West at 2.8%.
Contact the Newsweek editors on this story: Ben Kelly and James Debens.