US home price insights — May 2026

National home price growth

March 2026 data

Source: Cotality

‍

Affordability meter

Source: Cotality

‍

Insights from Chief Economist Dr. Selma Hepp

The national housing market is currently caught in a crosscurrent of pent-up demand and an affordability crisis. While home prices have not dramatically fallen on a national level, the pace of growth has notably slowed, with year-over-year price appreciation rising modestly to 0.4%. For most Americans, high mortgage rates have effectively fenced off homeownership opportunities.

"The housing market is currently stuck in a holding pattern,” notes Cotality’s Chief Economist, Dr. Selma Hepp. “Although housing inventories have been on the rise in many markets, broad discounting is still rare, keeping prices high. In fact, asking prices of newly listed homes continue to trend more than 2% above closing prices suggesting that very few sellers are budging on their expectations."

The pandemic-era darlings of the South and Mountain West have seen most notable cooling as prices outpaced local paychecks. For example, Austin fell 15% from it’s mid 2022 peak, followed by a number of West Coast Florida markets, and Oakland, CA.

However, many of these regions have seen prices rise again in 2026. Austin is up about 2.5% since the start of the year, while Oakland is up almost 2%. Florida markets, however, continue to oscillate despite stabilizing. A jump in mortgage rates in March has once again rattled potential homebuyers.  

Currently, Florida (-2.4%) and D.C. (-3.1%) have seen largest correction over the last year. Meanwhile, the Northeast and Midwest remain leaders of the pack. States like Illinois and New Jersey are still seeing gains north of 5.5%, largely because for-sale inventories in those markets remain 50% below pre-pandemic levels, and they avoided the price spikes a few years ago.

Perhaps the most notable finding from Cotality data is the massive divergence between current performance and forecasted growth on the West Coast. On paper, tech hubs like Seattle and San Jose look like they're struggling, with year-over-year numbers still in the red.  

However, the underlying fundamentals tell a different story. San Francisco home prices jumped 5% in the first three months of this year. These markets are starting to look normal or even undervalued relative to their long-term economic power. We’re likely witnessing these cities bounce off the bottom of their correction cycle before they begin to climb again.

“We’re witnessing a real split in opportunity. Market activity is increasingly limited to those with enough equity or cash to ignore mortgage rates, which only widens the gap for those trying to get their foot in the door," says Hepp.  

Looking ahead to March 2027, data suggests a broader market rebound. Meanwhile, mortgage rate volatility remains a wild card and persistently higher rates could dampen much of the expected increase in home prices and overall sales. But, as recent trends have shown, if mortgage rates ease, pent-up demand will likely break loose, ending the holding pattern and sparking a much-needed activity in the housing market.

 -Dr. Selma Hepp   

Cotality’s Chief Economist