Interstate Migration, Not Congress, Makes Housing Affordable

The U.S. House of Representatives and Senate are negotiating a new housing bill as Americans have become increasingly concerned with affordability. Unfortunately, any federal housing bill would do little to make housing more affordable and could even worsen the situation.

The median sales price of a U.S. home was $403,000 in the first quarter of 2026. That’s nearly five times the median household income, while generally accepted guidelines regard affordability as no more than 2.5 to 3 times income.

America’s affordability crisis is not evenly distributed. The least-affordable housing is mostly in the American West and Northeast, while housing in the South and Midwest is generally more affordable, according to the National Association of Realtors’ affordability report card.

Supply restrictions are the cause of the crisis. Most of these restrictions are imposed by state and local governments, and it’s no coincidence that jurisdictions with the most restrictions tend to be the least affordable. Unfortunately, Congress is limited in what it can do to ease them.

The Senate’s 21st Century ROAD to Housing Act would require the Department of Housing and Urban Development to publish guidelines to help localities streamline zoning and to expedite environmental reviews. It would also streamline some procedures for approving factory-built and manufactured homes.

These changes would help increase supply on the margin, but they will do nothing to prevent state and local governments intent on blocking development from continuing to do so.

Worse yet, the Senate bill would restrict large corporate landlords from purchasing additional single-family homes and would require new built-to-rent single-family homes to be sold to owner-occupants within seven years. These provisions would aggravate the affordability problem.

Corporate landlords are not a major reason for the high price of single-family homes. According to a Government Accountability Office report, they make up only 1 to 3 percent of purchases in the metro areas studied. Furthermore, when these purchases become rentals, they make rental housing more affordable.

The requirement to sell new built-to-rent homes within seven years would discourage investors from building them in the first place. While the bill is intended to increase single-family homes for sale to occupants, those sales would not materialize if the homes were not built.

The House version of the bill would eliminate the major restrictions on corporate investors. That would be a step in the right direction but would barely impact prices.

The good news is that Americans are solving their housing affordability problems in a meaningful way on their own—with their feet. California, New York, Illinois, Massachusetts and New Jersey have had the largest net outmigration since 2020, according to IRS data. Unsurprisingly, the National Association of Realtors’ report card, which ranks states for affordability and homebuilding, puts California, New York, and Massachusetts near the bottom and marks them with an F, while New Jersey and Illinois are in the bottom half.

Meanwhile, three of the top five states with the largest net in-migration, Texas, South Carolina and North Carolina, also ranked in the top five states on the Realtors’ report card. The other two states with the largest net in-migration, Florida and Tennessee, were in the top half.

In-migration, of course, puts upward pressure on housing prices. The fact that the states with the largest in-migration remain affordable is largely due to their lighter restrictions, which have allowed housing supply to grow with demand.

Congress is likely to do little to improve America’s housing affordability, but hopefully, the House will prevent the Senate’s bill from making things worse. Luckily, interstate competition can help Americans willing to move to find affordable housing for themselves.