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tates in the South and Midwest lead the nation in homebuilding and affordability, according to a new national housing report card. The report grades each state's response to the housing crisis, with South Carolina topping the rankings as the only state to receive an A grade.

    The 13 A and B grades were awarded to states in the South or Midwest, while the seven F grades went to states in the West and Northeast, where prices are typically higher and zoning regulations are stricter. No state received an A+ grade, indicating room for improvement in addressing the nation's housing supply gap of nearly 4 million units.

    The report card rankings are based on two major factors: housing affordability and the ability to meet future supply challenges through new construction. Affordability includes the Realtors' Affordability Score and the share of median income needed to make payments on a median-priced home, while homebuilding activity is measured by building permits per capita and the new-construction premium.

    South Carolina excels in both areas, with its typical new home priced 8.2% lower than the typical existing home. The state also outperforms in raw construction activity, with 3.2% of the nation's building permits last year despite hosting only 1.6% of the country's population.

    Texas and Iowa received A- grades for different reasons: Texas for its success in homebuilding, and Iowa for its current affordability. However, both states have room for improvement - Texas needs to focus on building smaller, more affordable homes, while Iowa's builders are constructing larger, more expensive homes that may neglect the needs of first-time buyers.

    The seven F-grade states - Oregon, Connecticut, California, Hawaii, New York, Massachusetts, and Rhode Island - combine poor home affordability with inadequate residential construction activity. These states need to address regulatory issues and zoning restrictions that raise construction costs and deter new construction.

    California, for example, has a notorious housing crisis due to excessive regulations and land use restrictions. Homebuilders blame these factors for raising construction costs and deterring new construction. New York also needs regulatory reforms to encourage more homebuilding, as red tape and regulations are major obstacles to building housing.