States leading the charge in new housing construction

The increased construction activity is anticipated to ease price pressures and affordability challenges as new homes become available around 2028 and 2029. While overall housing permit approvals nationwide remained essentially flat from January to August 2026 compared to the previous year, these leading states are actively working to address the national housing shortage.

According to the report, Idaho currently leads the nation, approving 12,994 housing units from January through August 2026—a 126% increase above the national average of 2.83 units per 1,000 residents. The state also ranks first in units permitted per cost-burdened household. However, despite the increased supply, Idaho residents would still need to earn 47% more income to achieve the same housing affordability levels as in 2018, when median home costs represented 28.7% of median income, compared to 42.1% today.

Nicholas Irwin, research director at the Lied Center for Real Estate, emphasized that while increased supply is beneficial, it’s crucial to consider the broader economic context. He noted that states with abundant land and growing populations, such as South Carolina, Kansas, and Nebraska, are naturally positioned to build more housing.

South Carolina holds the top spot in the report’s overall housing supply pipeline rankings, approving 33,822 permits from January through August 2026—114% above the national average. This represents a 5% increase from the same period in 2025 and a 15% increase from 2023. Residents in South Carolina would need approximately 35% more income to restore housing affordability to 2018 levels.

Tennessee rounds out the top ten, approving 3.88 permits per 1,000 residents, exceeding the national average. However, the state’s overall permitting activity is declining, with a 4.9% decrease from 2025 to 2026 and an 18.5% decrease from 2023 to 2026.

Irwin concluded that each state faces unique challenges and requires tailored solutions, stating, “There’s no one state that is sort of the perfect example, and there’s no one state that is perfectly problematic.”