US home price insights — March 2026

National home price growth

January 2026 data

Source: Cotality

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Affordability meter

Source: Cotality

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Insights from Chief Economist Dr. Selma Hepp

As 2026 begins, the national housing market continues its cooling trend, with January’s annual price growth slowing to 0.7%. This represents a further softening from December’s 0.9% increase and marks one of the lowest appreciation rates in recent history. However, while annual growth continues to slow, monthly changes have stabilized, suggesting that the national home price index is not likely to experience a significant further decline.

The Midwest has solidified its position as the nation’s strongest region, boasting an average year-over-year growth of 3.56%. This regional resilience is led by states like Illinois (+4.91%), Wisconsin (+4.78%), and Nebraska (+4.75%). In the Northeast, New Jersey (+5.6%) and Connecticut (+5.26%) continue to defy the national cooling trend, supported by relative affordability in smaller markets and sustained demand in major metro divisions like Newark and Camden.

“The current data reveals a 'two-speed' housing market,” said Cotality Chief Economist Dr. Selma Hepp. “While high-cost coastal and sunbelt regions undergo price corrections, the Midwest and Northeast are proving remarkably resilient due to their relative affordability and stable employment bases.”

In contrast, negative annual price growth hit 11 jurisdictions this month, with the steepest drops occurring in Florida (-2.36%), Colorado (-1.31%), Utah (-1.11%), and Hawaii (-1.11%). This downward trend has also expanded into major Western hubs like Arizona (-0.61%), Washington (-0.16%) and California (-0.15%).  

This shift reflects a cooling of the post-pandemic migration boom and the impact of expanded inventory levels finally meeting moderated buyer interest in previously overheated markets.  

Overall, January’s data confirms that price fluctuations are stabilizing. After a steady climb throughout 2025, the number of metros experiencing year-over-year price drops has plateaued, with one third of the nation’s top 100 metropolitan areas recording year-over-year declines in both December and January.  

Despite these localized declines, the broader market remains historically tight.  Persistent supply constraints are keeping home prices elevated, leaving 69% of top metros classified as overvalued and keeping homeownership out of reach for many.  

As we head into the spring buying season, the housing market looks more promising than it has in three years. Mortgage rates have hit a three-year low, inventory is finally rebounding in many regions, and buyers and sellers are finding more common ground on pricing. However, the reason behind those lower interest rates matters. If they are dropping due to a cooling economy or rising unemployment, the market's recovery could remain volatile.  

“Ultimately, locations with consistent job growth will remain the primary engines for price appreciation, but they also have larger inventory deficits which are driving pressure on home prices.”

-Dr. Selma Hepp  

Cotality’s Chief Economist