The U.S. housing market is in historic turmoil. Years of rock bottom interest rates, then the pandemic, and now an unprecedented cycle of tightening by the Federal Reserve that is likely not over yet, have left buyers and sellers in difficult spot.

Prices have begun to level off or decline in many areas in response to the higher mortgage rates. But according to the National Association of Realtors, homes are still difficult to find and even harder to afford. Some states are handling all this upheaval better than others, and companies of all kinds are watching this closely. With qualified workers in such short supply, business leaders are looking for places with healthy housing markets, where prospective employees can make smart purchases and enjoy a happy home.

CNBC’s annual competitiveness study, America’s Top States for Business, is watching too, measuring the housing market in many of the same ways that companies do.

Under our 2023 methodology, housing is a metric in the Economy category, one of the most important in our ten categories of competitiveness. To determine which states have the healthiest housing markets, we consider multiple factors including price appreciation, housing starts, foreclosure rates, and affordability. This year we included as a metric NAR’s Affordability Distribution Score, which looks at the affordability of homes for sale across all income levels, as of the end of last year. A score of 1 or higher generally suggests a housing market that is affordable, while the lower a score falls below 1, it is an indicator of a less affordable market without enough listings in local buyers’ range.

These 10 states are positioned to give you the best bang for your housing buck.

Here in the Heart of Dixie, prices are rising by double digits, according to the Federal Housing Finance Agency, but housing is still relatively affordable. Foreclosure activity in Alabama is still low, according to Attom Data Solutions, though a concerning percentage of mortgages are at risk of default.

2023 Economy Rank: No. 21 (Top States grade: C)

Appreciation: 10.25%

Affordability score (0 to 2, with 2 being most affordable): 0.74

Starts per 1,000 population: 3.8

Foreclosure rate: 1 in 5,934 homes

Underwater mortgages: 3.8%

The Badger State is also seeing healthy price appreciation and relatively low foreclosure activity. According to real estate marketing firm Redfin, the number of homes sold in Wisconsin fell by 20.9% in May, more than the national average of 15.8% But that is likely to help already strong affordability.

2023 Economy Rank: No. 20 (Top States grade: C)

Appreciation: 10.03%

Affordability score: 0.76

Starts per 1,000 population: 3.6

Foreclosure rate: 1 in 8,769 homes

Underwater mortgages: 4.2%

The Buckeye State boasts America’s most affordable housing, according to the National Association of Realtors, though it comes at the cost of less-than-stellar price appreciation. Home buyers in Ohio are also benefitting from homeowners’ misfortune, with a high foreclosure rate and underwater mortgages on the rise.

2023 Economy Rank: No. 21 (tie) (Top States grade: C)

Appreciation: 8.7%

Affordability score: 1.00

Starts per 1,000 population: 2.6

Foreclosure rate: 1 in 2,478 homes

Underwater mortgages: 5%

Find your garden in the Garden State, and a good home to go with. The New Jersey market started 2023 fairly well-balanced as home builders generally kept pace with demand. Housing helped make New Jersey this year’s Most-Improved State for Business, and underwater mortgages have been low, but an uptick in foreclosures this spring could be a sign of trouble.

2023 Economy Rank: No. 19 (Top States grade: C)

Appreciation: 8.3%

Affordability score: 0.68

Starts per 1,000 population: 4

Foreclosure rate: 1 in 2,257 homes

Underwater mortgages: 2.8%

The Hoosier State is typically the picture of stability. It entered 2023 with solid affordability even as home prices rose. Underwater mortgages in Indiana were relatively low in the first quarter of 2023, but foreclosures are rising.

2023 Economy Rank: No. 9 (Top States grade: B)

Appreciation: 9.5%

Affordability score: 0.9

Starts per 1,000 population: 4.2

Foreclosure rate: 1 in 3,101 homes

Underwater mortgages: 3.3%

The Peach State is posting some solid housing numbers across the board, including double-digit price appreciation while remaining relatively affordable. But rising foreclosures in Georgia suggest some possible signs of stress.

2023 Economy Rank: No. 4 (Top States grade: A-)

Appreciation: 11.4%

Affordability score: 0.65

Starts per 1,000 population: 7.2

Foreclosure rate: 1 in 3,506 homes

Underwater mortgages: 3%

As people and companies run to the Tar Heel State, this year’s overall No. 1 State for Business, the resulting housing demand is boosting prices. Strong construction activity in North Carolina is helping to meet that demand, but not enough to keep homes within reach for much of the growing population.

2023 Economy Rank: No. 3 (Top States grade: A)

Appreciation: 13.4%

Affordability score: 0.6

Starts per 1,000 population: 8.7

Foreclosure rate: 1 in 3,683 homes

Underwater mortgages: 2.5%

Despite its lackluster economy, home buyers have been discovering the Pine Tree State and sending prices upward. Homebuilders in Maine took the cue last year, with strong activity on a per capita basis. As a result, affordability has not gotten out of hand.

2023 Economy Rank: No. 38 (Top States grade: D+)

Appreciation: 12.2%

Affordability score: 0.67

Starts per 1,000 population: 5.2

Foreclosure rate: 1 in 5,019 homes

Underwater mortgages: 2.5%

Homeowners in the Palmetto State enjoyed solid price appreciation going into 2023. But prices in South Carolina are still affordable, especially relative to the rest of the region. It helps that homebuilders are meeting the moment with strong activity. But rising foreclosures bear watching.

2023 Economy Rank: No. 7 (Top States grade: B+)

Appreciation: 13%

Affordability score: 0.68

Starts per 1,000 population: 8.8

Foreclosure rate: 1 in 2,691 homes

Underwater mortgages: 3%

The Sunshine State’s housing market is in a class by itself. As new Floridians flock to the state, they have been sending prices soaring. That has led to a home-building boom in Florida. Underwater mortgages are rare, but rising foreclosures could be a sign of stress. That could help bring affordability back down to earth in America’s strongest housing market.

2023 Economy Rank: No. 1 (Top States grade: A+)

Appreciation: 15.2%

Affordability score: 0.5

Starts per 1,000 population: 9.7

Foreclosure rate: 1 in 2,470 homes

Underwater mortgages: 1.2%

Source: These 10 States are America's Strongest Markets, Offering Buyers the Best Value CNBC (July 19, 2023) Scott Cohn