By the most reliable measure of housing affordability — the portion of income households devote to rent or mortgage plus other housing expenses — the Midwest stands as the country's most affordable region, according to a new analysis published October 5, 2026, by the Economic Innovation Group. The report challenges common assumptions about the region, finding that the most budget-friendly communities aren't struggling former industrial towns but thriving middle-class metros with strong manufacturing bases, stable incomes, and job growth. In 2024, nine of the ten most affordable core-based statistical areas in the U.S. were located in the Midwest, and all ten ranked in the top half nationally for household income.
Le Mars, Iowa, claimed the title of the nation's most affordable housing market in 2024, with residents spending just 17 percent of their income on housing costs that year. The town, known as the ice cream production capital of the world, boasts a median household income of roughly $83,000 and employs thousands at the Blue Bunny ice cream manufacturing plant. Warsaw, Indiana, ranks as another affordable market where more than a third of jobs in 2024 were in manufacturing, and the region recently attracted a $400 million investment for a new factory producing electric pickup trucks. By contrast, Key West, Florida, was the least affordable market in the country in 2024, where the typical household spends 34 percent of its income on housing — twice the share in Le Mars. The analysis reveals that housing shortages track closely with unaffordability: in 2023, the typical unaffordable market ran short by an amount equal to 2.4 percent of its existing housing stock, while affordable markets were short by only 0.6 percent.
The report finds that restrictive land-use rules in most places make building enough housing overly burdensome or outright illegal, and that the evidence showing supply lowers costs is abundant. Study after study demonstrates that building more housing slows price growth, according to the authors. Los Angeles has maintained a shortage of 7 to 8 percent of its housing stock every year over the past decade, amounting to roughly 334,000 missing units. Even fast-growing metros that have built aggressively haven't kept pace with demand: Miami's shortage spiked past 8 percent in 2019 before easing to 4.5 percent by 2023, while Naples, Florida, expanded its housing stock by a quarter over the decade yet still shifted from a surplus in 2012 into a shortage by 2023 as demand outpaced rapid construction.
But storm clouds are gathering over the Midwest's affordability advantage. In 2025, the region recorded positive net domestic migration for the first time in a decade, as more Americans moved in from other states than left. The report warns that the same demand pressure that made other regions unaffordable may now be moving to the heartland, pointing to the Mountain West as a cautionary tale — after a large pandemic-era demand surge, Colorado and parts of Idaho now face housing affordability problems reminiscent of California, Oregon, and Washington. Several Midwestern metros are already showing warning signs: Appleton, Wisconsin, ran a housing surplus in 2012 equal to about half a percent of its stock but by 2023 had swung to a shortage of nearly 6 percent, the largest gap among affordable places. The mechanism is identical to costlier regions: household growth is outpacing new construction. The report concludes it's time for America's last affordable places to heed the warning and act before shortages deepen and housing costs spiral beyond reach for middle-class families.