Rhode Island households spending 8.4% more as affordability crisis worsens, report finds

PROVIDENCE, R.I. — A new report is highlighting just how severe the affordability crisis has become in New England, with Rhode Island ranking as the hardest-hit state in the country.

According to an analysis from Realtor.com, households across the region are facing growing financial strain as housing costs continue to outpace income growth, pushing basic living expenses higher than in most other parts of the United States.

The report found that New England states are among the most impacted nationwide, driven by a combination of high home prices, limited housing supply, and rising costs for essentials like insurance and childcare. A lack of new construction has further tightened inventory, making it increasingly difficult for buyers and renters to find affordable options.

Rhode Island stood out in the findings, posting the largest drop in affordability in the nation since 2019. Households in the state are now spending about 8.4% more of their income on basic expenses, leaving less room for discretionary spending.

The report also underscores the state’s housing shortage. Rhode Island, which ranked last in the overall report card, accounts for just 0.3% of the U.S. population but filed only 0.1% of building permits in 2024, despite new construction homes demanding a 43.8% premium.

Neighboring Massachusetts ranked close behind at 8.1%, with residents there also seeing a significant increase in the share of income going toward essential costs.

Housing was identified as the primary driver of the crisis across the region. Experts point to persistent underbuilding, limited available land, and rising construction costs as key factors contributing to the shortage.

As affordability continues to decline, the report suggests many households in Rhode Island and across New England are being forced to make difficult financial decisions, with fewer resources left over after covering basic needs.