A national housing “report card” was recently released by Realtor.com that ranks each state in housing affordability and new home construction activity. Because of the ongoing national housing shortage, both affordability and inventory are important issues.

For this report, affordability was determined by the share of median income required to purchase a median-priced home. Homebuilding activity was measured by the number of building permits per capita and the price difference between new and existing homes.

The report indicates that policy, regulatory environment and construction activity vary from state to state.

“Our state report card rankings reveal stark disparities in housing affordability and homebuilding efforts across the U.S.,” said Danielle Hale, chief economist for Realtor.com. “While some states are leading the way with strong homebuilding activity, others are grappling with high housing prices and sluggish construction.”

South Carolina was the only state to earn an A. Not only were new homes in the Palmetto state priced 8.2% lower than existing homes, but their affordability ranked at 24 nationally, with the median home price at about 5.5 times the median annual salary. Furthermore, despite being home to only 1.6% of the U.S. population, South Carolina accounted for 3.2% of national residential building permits.

Not far behind were Iowa and Texas, each with an A-. Iowa’s ranking is largely due to the Hawkeye state having the best affordability ratio of all the states, with a median list price of $294,600, or about 4.03 times the median local salary of $73,122. Iowa falls behind on issuing new building permits, and when new homes are built, they cost 58% more than existing homes.

Texas has experienced a boom in homebuilding, having issued 15.3% of the nation’s residential permits last year for its 9.2% share of the U.S. population. The Lone Star state lost points on affordability. The median new construction home in Texas costs 7.5% more than an existing home, higher than the national trend of 3.4%.

Both states need to build smaller, lower-cost homes to improve their grade.

At the other end of the scale are seven states: California, Connecticut, Hawaii, Massachusetts, New York, Oregon and Rhode Island—the smallest state in the union and the one with the lowest overall ranking, which Realtor.com speculated could be more than a coincidence: lack of available land to build on.

States with failing grades may face increasing pressure to reform existing regulations that limit their housing supply.

“If California is serious about solving its housing crisis, we need a legal and regulatory system that supports—not stifles—homebuilding,” says Dan Dunmoyer, president and CEO of the California Building Industry Association. He says that includes environmental regulation reform, streamlined permitting and more flexible land-use policies. These ideas are reportedly gaining attention from builders and policymakers.