Pennsylvania Is Struggling in Affordability and Homebuilding: Can Gov. Shapiro Bridge the Gap?

Pennsylvania’s housing market is caught in a slow squeeze.

The Realtor.com® State-by-State Housing Report Card gave the Keystone State a C, reflecting modest affordability but limited construction activity. The report—part of the Let America Build campaign—evaluates how each state balances homebuilding with housing costs. Pennsylvania’s results point to a market where older housing stock dominates and new construction has failed to keep up with modern needs.

That's not to say though that this isn't a national problem. In fact, President Donald Trump recently put pressure on homebuilders to increase construction nationwide, given the issues with construction in the country. 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.” 

Pennsylvania’s “C” grade explained

Realtor.com analysis gave Pennsylvania a total score of 48.3, placing it near the middle of the national rankings. The state’s median listing price was $306,740 in 2024, paired with a median household income of $74,466. The Realtors Affordability Score came in at 0.82, suggesting that homes are more affordable than in most coastal states but less so than in the Midwest.

On the construction front, Pennsylvania accounted for just 1.6% of national housing permits last year, despite making up 3.8% of the U.S. population. That leaves the state with a permit-to-population ratio of roughly 0.42—among the weakest in the nation.

The new construction premium—the price difference between new and existing homes—was 89.9%, showing that new builds remain a luxury for most buyers.

The Northeast’s affordability challenge

Nationwide, new construction is helping ease affordability, but the impact is uneven. The Realtor.com New Construction Insights report found that the median new-home price held steady at $450,797, while resale prices rose 2.4%, narrowing the national new construction premium to just 7.8%, the lowest on record.

In the Northeast, however, housing production remains slow. The region has the lowest share of new-construction listings and the highest cost gap between new and existing homes. Strict zoning, limited land availability, and high labor costs have constrained supply.

In Pennsylvania, the state’s largest metros—Philadelphia, Pittsburgh, and Allentown—face distinct challenges. Philadelphia’s historic housing stock drives high maintenance costs, while western markets like Pittsburgh struggle with limited new development despite lower prices.

But again, the pinch is being felt all over.

“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 Shapiro’s plan to expand housing supply

Governor Josh Shapiro has made workforce and affordable housing central to his economic agenda. In 2025, his administration launched new initiatives aimed at revitalizing older neighborhoods, expanding housing access for first-time buyers, and supporting workforce development in the construction trades.

The centerpiece of Shapiro’s approach is the Commonwealth Housing Investment Program (CHIP), a proposed $250 million initiative designed to accelerate the construction of affordable and mixed-income housing. The plan would leverage state and federal funds to finance infrastructure, lower building costs, and rehabilitate aging homes in disinvested areas.

“Housing is not just a roof over someone’s head—it’s the foundation of our communities and our economy,” Shapiro said when unveiling the plan. “We’re going to make it easier to build, easier to buy, and easier to stay.”

His administration also announced efforts to streamline permitting and strengthen partnerships with local governments to promote redevelopment of vacant and underused properties.

To that end, Pennsylvania’s C grade shows a state with strong fundamentals but slow follow-through. If Governor Shapiro’s investment plan succeeds, it could bring new energy to a housing market that has lagged behind its peers.

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