Iowa continues to rank among the most affordable states for housing ownership and is on track to close its housing shortage under current trends, according to a new report from the Common Sense Institute (CSI).
The Des Moines-based think tank released its Q4 2025 Housing Affordability in Iowa report, which found the state ranks eighth most affordable nationally based on mortgage costs, 10th relative to earnings and ninth when property taxes are included.
The typical Iowan needs to work 36 hours per month to afford a new mortgage, compared to 51 hours nationally. Ninety-one of Iowa’s 99 counties require fewer work hours than the national average to afford a mortgage.
Home values increased 3.7% year-over-year from December 2024 to December 2025, according to the report.
Property taxes account for 19% of total monthly homeownership costs, ranking Iowa 10th highest nationally for property tax share.
Iowa faces an estimated 12,937-home shortage in 2025, but the report projects that gap could close by 2028 if current trends continue. Local governments issued 13,365 residential building permits in 2025, a 9.7% increase year-over-year and the highest level since 2005.
“Iowa continues to stand out nationally for housing affordability and, at current trends, is on track to close the housing shortage,” said Ben Murrey, director of policy and research at the Common Sense Institute. “Policymakers could make homeownership even more affordable by lowering the state’s high property tax burden.”
The Common Sense Institute bills itself as a nonpartisan research organization dedicated to the protection and promotion of Iowa’s economy.
