US home price insights — July 2026

National home price growth

May 2026 data

Source: Cotality

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Affordability meter

Source: Cotality

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Insights from Chief Economist Dr. Selma Hepp

The U.S. housing market appears to be building momentum, albeit very slowly. Following a steady two-year slowdown, home price appreciation accelerated in May, ticking up to an annual pace of 0.8% from April’s 0.6%. This acceleration indicates that beneath a seemingly frozen surface, local demand is aggressively testing the constraints of elevated mortgage rates. Unlike the price drops observed at this time last year, home prices this spring are holding much firmer.

"The U.S. housing market in mid-2026 remains firmly entrenched in a geographic split, shaped fundamentally by an affordability gap and a wealth gap that continues to divide buyers across the nation,” notes Cotality’s Chief Economist, Dr. Selma Hepp.

This spring’s home price momentum largely reflects each market’s distinct inventory dynamics and regional economic drivers. In the affordable Midwest, budget-friendly pricing continues to be the primary engine driving price increases, shifting buyers from high-cost coastal markets toward regions with lower barriers to entry. At the state level, Illinois led year-over-year growth at 5.9%, followed closely by Maine at 5.6% and Indiana at 5.6%. Spring momentum—measured from February to May—was particularly strong in Midwest metros like Lake County, IN, which grew by 5.9%, Milwaukee, WI, at 4.8%, and Indianapolis, IN, at 4.7%.

Conversely, some regions that experienced rapid growth in recent years are hitting a hard ceiling, quietly rolling over into a cooling phase ahead of the rest of the country. For example, while the New York division (+1.6% YoY) and Nassau County/Long Island (+3.4% YoY) show long-term annual resilience, their three-month price changes have turned negative, declining 0.6% and 0.4%, respectively. Rochester, NY, previously a top-appreciating market, saw a sharp reversal with a three-month decline of -2.0.%, marking the steepest drop among large metros.

Meanwhile, early-2020s boomtowns in the South that have undergone steady corrections have officially established their price floors. Although Austin, TX (-2.9% YoY) and Cape Coral-Fort Myers, FL (-3.3% YoY) look weak on paper, their three-month changes have stabilized at a minimal 0.0% and -0.1%, indicating active stabilization. On the other end of the spectrum, the highly segmented West Coast landscape is being propelled by AI investments and newly minted tech wealth. San Francisco's three-month metric reveals a striking reality: a staggering 7.6% of its 8.9% annual growth occurred in the last 90 days alone.

"What we are witnessing is a profound segmentation of opportunity," Hepp explains. "Buyers who are well-insulated from mortgage rate volatility—bolstered by substantial accumulated home equity and robust wealth gains—are continuing to look at high-value regions like San Francisco, driving a strong near-9% annual rebound in a market that remains fundamentally healthy and structurally undervalued relative to long-term income baselines."

These stark regional differences are fundamentally tied to underlying supply. While total national inventory has moved relatively flat over the last 12 months, new listings have actually decreased across the South and West. Meanwhile, inventory growth has been concentrated in mid-sized, more affordable Midwestern markets. Together, these supply shifts are helping establish the price floors in Florida and Texas while finally moderating the rapid price gains across the Midwest.

Consequently, the gap between the nation’s strongest and weakest housing markets has narrowed to near-record lows compared to a year ago, pointing to a more synchronized national home price trend than we have seen in recent years.

Looking ahead, our baseline forecast points toward a gradual mean-reversion over the next year, and we expect national annual price appreciation to step back up toward a more balanced historical average. However, until we see sustained relief in mortgage financing costs and systemic improvements in affordability, the wedge between equity-rich move-up buyers and aspiring first-time homeowners will remain the defining feature of this housing cycle.