As the House and Senate negotiate a new housing bill, Americans are fed up with soaring costs. But the reality is that Washington's best efforts may fall flat—and could even backfire.
The median U.S. home price hit $403,000 in early 2026, nearly five times the median household income. Conventional wisdom says housing is affordable when it costs no more than 2.5 to 3 times income. By that measure, the nation is in deep trouble.
Yet the crisis isn't uniform. The National Association of Realtors' affordability report card shows the West and Northeast are the most unaffordable, while the South and Midwest remain relatively affordable. The culprit? Supply restrictions imposed by state and local governments—not federal policy.
The Senate's 21st Century ROAD to Housing Act would nudge localities to streamline zoning and speed up environmental reviews. It would also ease approvals for factory-built homes. These steps might help on the margins, but they won't stop local governments that are determined to block development.
Worse, the bill includes provisions that could actually worsen affordability. It would restrict large corporate landlords from buying additional single-family homes and force new built-to-rent homes to be sold to owner-occupants within seven years. But corporate landlords aren't the problem: a Government Accountability Office report found they account for just 1 to 3 percent of purchases in studied metro areas. And when they buy and rent, they increase rental supply, which eases pressure on renters.
The forced-sale requirement would discourage investors from building new rental homes in the first place. The House version strips out those restrictions, which is a step forward but still won't meaningfully lower prices.
Meanwhile, Americans are solving the problem themselves—by moving. IRS data shows California, New York, Illinois, Massachusetts, and New Jersey have seen the largest net out-migration since 2020. Unsurprisingly, those states rank near the bottom of the Realtors' report card. In contrast, top in-migration states like Texas, South Carolina, and North Carolina also rank among the top five for affordability and homebuilding. Florida and Tennessee, also big gainers, sit in the top half.
In-migration does push prices up, but states with lighter restrictions have allowed supply to keep pace with demand. That's why they remain affordable despite population growth.
Congress is unlikely to do much to fix housing affordability. The best hope is that the House prevents the Senate bill from making things worse. In the meantime, interstate competition offers a real, if painful, solution: for those willing to move, affordable housing exists elsewhere.
Benjamin Powell, a senior fellow at the Independent Institute and director of the Free Market Institute at Texas Tech University, is co-editor of Housing America: Building Out of a Crisis.
