Maine Is Struggling in Affordability and Homebuilding: Can Gov. Mills Close the Gap?

Maine’s picturesque coastal towns and small cities have long drawn new residents—but that popularity has come with a cost.

The state earned a C on the Realtor.com® State-by-State Housing Report Card, part of the Let America Build campaign that evaluates how states balance affordability and new construction. Despite strong demand, Maine’s tight housing inventory and slow permitting have pushed prices higher and affordability lower.

But this problem is not unique to New England. 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.” 

What can Maine do next to encourage more construction in the state?

A market under pressure

Maine earned a total score of 51.1, placing it near the bottom of the national rankings. The median listing price in 2024 reached $440,523, while the median household income stood at $71,476—a mismatch that continues to strain middle-income buyers. The Realtor Affordability Score came in at 0.58, signaling that only a limited share of listings are within reach for typical households.

The state’s new construction metrics remain weak. Maine accounted for just 0.4% of all new home permits in 2024 while representing about 0.4% of the U.S. population. That puts its permit-to-population ratio at roughly 0.6, showing that new supply is failing to keep up with demand.

The new construction premium—the price gap between new and existing homes—was 40.6%, suggesting that newly built homes are priced well above what many residents can afford.

Regional and national context

Realtor.com New Construction Insights report shows that new homes nationwide are helping ease affordability challenges. The median listing price for new construction was $450,797—nearly unchanged year over year—while resale home prices rose 2.4%. That lowered the national new construction premium to 7.8%, the lowest in the dataset’s history.

But in the Northeast, states like Maine continue to struggle with limited land availability, restrictive zoning, and high development costs. The region’s inventory constraints remain the tightest in the nation. While the South and Midwest have seen rapid new construction growth, the Northeast has the lowest share of new builds and some of the largest affordability gaps.

“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 Mills’s housing priorities

According to the State of Maine Housing Production Study from 2023, 84,00 additional homes are needed in the state by 2030. 

While the report found that a household income of less than $100,000 was required to afford a median price home, there needs to be a 2x increase in annual building permits statewide if the housing goals are to be met. 

For her part, Governor Janet Mills has made housing supply a central focus of her administration. Her latest legislation builds on Maine’s 2022 law requiring towns to allow at least two housing units on all residential lots, a reform aimed at increasing density in communities resistant to growth. 

Maine lawmakers passed several new laws in the summer of 2025 including removing additional regulatory barriers on where housing can be built and tax credits to invest in the reuse of historic buildings.

These initiatives have seen a dramatic increase in new construction just in the last year alone 

For almost two decades, Maine developers were building an average of 250 affordable units per year, Mills said at the launch of a new affordable housing development in Brunswick. In part because of the news laws, she said, “we’ve now finally eclipsed 1000 units per year.”

“While the need for housing is still significant, I’m proud of the number of homes we’ve built so far for Maine families,” Mills added.

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