Connecticut Is Failing in Affordability and Homebuilding: Can Gov. Lamont Turn It Around?

Connecticut’s housing market continues to face steep affordability challenges, with too few homes being built to meet rising demand.

The state earned an F on the Realtor.com® State-by-State Housing Report Card, part of the Let America Build campaign that tracks how effectively each state balances affordability and new construction.

Despite its strong economy and high household incomes, Connecticut’s housing supply remains constrained, driving up prices and leaving many residents priced out.

But this is a national issue. Hoping to spur on action, President Donald Trump recently put pressure on large homebuilders to increase construction nationwide. In a post on his Truth Social platform in early October, he accused major builders of hoarding lots to prop up prices—likening them to OPEC, which restricts oil output to maintain high prices.

“They’re my friends ... but now, they can get Financing, and they have to start building Homes. They’re sitting on 2 Million empty lots, A RECORD,” Trump wrote. He urged Fannie Mae and Freddie Mac to intervene and “get Big Homebuilders going” to “restore the American Dream.” 

Here's where Connecticut ranks on the national stage and how local government is responding.

A tough market for homebuyers

Connecticut earned a total score of 28.3, placing it among the lowest-ranked states nationwide. The state’s median listing price of $517,849, paired with a median household income of $89,717, illustrates the deep mismatch between wages and housing costs. The Realtor Affordability Score came in at 0.64, showing that even higher-income households are struggling to find homes within reach in this area.

On the construction front, Connecticut accounted for just 0.4% of all new home permits in 2024 while representing about 1.1% of the U.S. population. That yields a weak permit-to-population ratio of 0.36, signaling that the state is building far less than needed.

The new construction premium—the difference between the price of new and existing homes—was 68.2%, among the highest in the country, suggesting that most new builds target the luxury market rather than middle-income buyers.

Regional challenges

According to the Realtor.com New Construction Insights report, new homes nationwide are becoming more affordable, but that trend hasn’t reached much of the Northeast. Nationally, the median listing price for newly built homes was $450,797, nearly flat year over year, while existing home prices rose 2.4%. That narrowed the national new construction premium to a record-low 7.8%, making new builds more competitive in many regions.

But in the Northeast, zoning restrictions, high construction costs, and limited available land continue to stifle development. Realtor.com economists note that this region ranks last in housing supply relative to demand, as lengthy permitting processes and strict local zoning codes keep new construction out of reach for most communities.

In short, construction needs to ramp up.

“America is short more than 4.7 million homes, and every new home built helps close that gap while fueling local economies," says Shannon McGahn, executive vice president and chief advocacy officer at the National Association of Realtors®.

"NAR research shows that the U.S. has faced a persistent housing shortage for more than a decade, driving up prices and limiting options for buyers. Expanding housing supply creates jobs, supports small businesses, and affords families the opportunity to build generational wealth.”

Governor Lamont’s plan for housing growth

Governor Ned Lamont has acknowledged that Connecticut’s lack of housing supply poses a long-term risk to the state’s economic competitiveness.

However, a report from the state’s Office of Legislative Research found that more than half of the affordable housing units Connecticut funded over the past six years were rehabilitated properties rather than new construction.

The report, obtained by The Connecticut Mirror, examined the number of state-sponsored affordable housing units built under Gov. Lamont. Since 2019, just over 13,700 units of affordable housing have received state funding, and about 8,000 of those were rehabilitated homes instead of newly constructed units.

The report was released shortly after the governor spoke at a Department of Housing conference, claiming that under his leadership, the state is building more housing than in past years.

“We built more new housing … over the last three years than we have during any three-year period 10, 20 years ago,” he said at the conference, according to Hartford Courant. “We’ve built probably 70% more housing than during that time.”

Yet during the last legislative session, Governor Lamont vetoed H.B. 5002 on June 23, 2025, a bill supporters said would reform zoning limitations and increase the housing supply.

Connecticut’s F grade in housing highlights the challenges facing a state where high incomes mask deep affordability issues. The National Association of Home Builders’ Blueprint to Address the Housing Affordability Crisis calls for cutting red tape, promoting skilled trades, and updating outdated zoning to make it easier and faster to build homes at all price points. It argues that expanding supply is the only sustainable solution to rising housing costs.

Without meaningful reforms to zoning and a stronger emphasis on new construction, Connecticut risks falling further behind in addressing its housing crisis.

This article was produced with editorial input from Dina Sartore-Bodo and Gabriella Iannetta.