The New Geography Of The U.S. New-Home Affordability Crisis

Home prices soared in many cities in the U.S.’s sunnier coastal spots during the COVID-19 pandemic. Still, while pervasive, America's new-home affordability crisis has been anything but even-handed in spreading the pain and challenge to new homebuilders and residential developers.

According to a just-released Urban Land Institute index, Mountain West cities led all regions in percentage increases in buyers' prices for new homes.

The Boise, Idaho, metropolitan area topped the list with a 73.13% change in the cost of owning a new home between 2019 and 2023, the most recent data on the ULI’s Terwilliger Center Home Attainability Index produced with RCLCO Real Estate Consulting. Mountain West metros dominated the top 10.

Coeur d’Alene and Idaho Falls followed Boise. Bozeman, Montana, was next, followed by Twin Falls, Idaho. The Top 10 – for percentage increases in new home median prices – includes Longview-Kelso, Washington; St. George, Utah; Logan, Utah, a metro that crosses over into Idaho; and Spokane, Washington, about 30 miles west of Coeur d’Alene. The Homosassa Springs, Florida, area, 80 miles north of Tampa, is the only non-Mountain West metro in the top 10.

The ranking may surprise some, considering that much of the national attention on skyrocketing housing prices and increasing affordability issues focuses on the “smile states,” which stretch from parts of North Carolina to Florida and California.

According to Census data, home construction in the South has exceeded western states for decades because of population and job growth. The data doesn’t break out Mountain West states as a separate region (many consider those states part of the Northwest).

Scale Defines the Difference

It’s a matter of degree relative to absolute baselines in housing supply, household growth (demand), and homebuilders' building. According to Census data, Idaho’s population grew by 125,620 between 2020 and 2023 to just under 2 million, 6.8% growth. This growth overwhelmed the housing supply in the state’s largest cities, as Californians flocked to more affordable Idaho cities. As a result, prices soared. Construction ramped up, but there was a steep hill to climb to meet demand.

Florida’s population grew by 1.1 million, a 5% gain over the same period, to 22.6 million. Home prices increased dramatically there, too. Rent growth also hit historically high levels.

However, Florida’s long history of development and much larger population absorbed the pandemic-era population growth more smoothly than the Mountain West states did. The ULI index and its data points make this clear. Between 2019 and 2023, the cost of owning a new home in the Miami metro rose 40.85%, in Tampa, 51.28%, and in Orlando, 47.2%. 

Building New in the Suburbs

The cost of owning a new home changed by 74.24% in Boise County, which includes Boise City. It’s the seventh-highest county on the index. Four counties around Boise were higher, reflecting where new home construction was happening to meet demand. Gem County, just north of Boise, showed the highest change, nearly 102%.

National builders such as Lennar and Toll Brothers are building homes in Idaho. In earnings, Idaho is lumped into the West category, which includes Arizona, Colorado, Utah, and Nevada. For its fiscal year ending Oct. 31 last year, Toll Brothers sold 2,984 homes in the West. Lennar sold 5,721 in 2024, down from 6,145 the previous year.

Hendry County east of Ft. Myers was in the top 10 for change by county, with nearly 79%. Idaho, Montana, and Utah counties took most of the Top 25, with a handful of Tennessee counties appearing. Southern counties began appearing more frequently among the next 25.  

The magnitude of the difference between southern and Mountain West cities appears in the index’s cost-to-rent data. Bozeman led with a 46.55% change, with Boise second at 44.36%. Cape Coral/Ft. Myers was the only Florida metro in the Top 10, with a 38.39% change. Orlando was the next Florida metro in the ranking, at 37.11%. Several Florida cities were above 30%, and Miami was below that. Apartment construction boomed in those years to the point of oversupply now.

Florida cities drew headlines because of affordability. Voters in Orange County, which includes Orlando, approved rent control in 2022. Court battles erupted, ending in the county’s defeat in 2023. Florida passed a law that year blocking local governments from considering rent controls or rent stabilization.

Boise sought to address affordability by passing an ordinance in 2023 to loosen zoning rules on accessory dwelling units (ADUs). The ordinance allowed ADUs up to 900 square feet and eliminated the parking requirement. Applications for ADUs have boomed.

Montana passed a law in 2023 to allow duplexes to be built in single-family areas and ADUS. The law faced a legal challenge, but last September, the state’s top court overturned a lower court ruling, allowing what’s been dubbed the “Montana Miracle” to move forward.