U.S. Home Prices Flatten as Regional Disparities Widen

The data from August highlights the persistent regional disparities among markets. Beneath the modest national price increases, Cotality data reveals a more nuanced narrative. Throughout the United States, a growing number of metropolitan areas are experiencing a cooling trend, even in regions that previously exhibited resilience.

Key Findings:

In July 2026, the prices of single-family homes in the U.S. rose by 1.4% compared to July 2025. Month-over-month, there was no change in home prices from June 2026, remaining at 0%.
Cotality’s projections indicate that U.S. home prices are expected to increase by 2.0% year-over-year in July 2027.
After experiencing four consecutive months of the highest year-over-year price increases in the country, San Francisco experienced a sudden shift, with a month-over-month price decline of 1.4% this July.
Among the states, Connecticut and Illinois recorded the highest annual growth in July, with increases of 6.8%. They were followed by Indiana at 5.3%, New Jersey at 5.0%, and Nebraska at 4.9%.
In July, 19 metro areas reported negative price momentum over the past three months, an increase from 10 in June.

“While prospective buyers may feel squeezed by volatile mortgage rates, slower home price appreciation should gradually help ease affordability pressures—especially if wage growth remains consistently stronger,” said Dr. Selma Hepp, Chief Economist at Cotality. “As we move through the remainder of the year, local labor market dynamics and affordability constraints will continue to shape housing market performance as much as broader macroeconomic shifts, especially the direction of mortgage rates.”

While the Sun Belt is witnessing sluggish growth, certain areas in the Northeast, which have shown remarkable resistance to price declines, are starting to indicate a shift. Philadelphia recorded the most significant drop in annual momentum among leading markets, decreasing by 2.3 percentage points since June. Nevertheless, price reductions are primarily concentrated in the western regions of the U.S., with major cities like San Francisco experiencing a 2.6% decline in prices over the past three months. San Jose, CA, also faced one of the steepest three-month price reductions.

The most substantial three-month declines are still found in the West, including cities such as San Jose, CA; Austin, Texas; Bakersfield, CA; and Everett, WA. This trend suggests that elevated prices, buyer fatigue, and uncertainty regarding AI-driven wealth increases are significantly impacting higher-priced markets.

However, there are still areas experiencing price appreciation. Connecticut and Illinois reported the highest annual home price growth at 6.8%, followed by Indiana at 5.3%, New Jersey at 5.0%, and Nebraska at 4.9%. Generally, prices in the Northeast continue to rise due to a limited number of homes entering the market and a shortage of new construction.

On a more localized scale, some regions are defying state-level trends. Abilene, Texas, remains at the forefront nationally with an estimated 13.3% year-over-year increase, bolstered by local investments related to AI and the accompanying wage growth.

The top markets at risk for price declines in the next 12 months, according to Cotality’s Market Risk Indicators include:

Buffalo-Cheektowaga, NY
Cambridge-Newton-Framingham, MA
Providence-Warwick, RI-MA
St. Petersburg-Clearwater-Largo, FL
Worcester, MA

The metro areas recognized as having the greatest risk of home price decreases are primarily located in the Northeast, where affordability has notably worsened in comparison to local income levels. As local incomes have not increased in line with escalating home values, these markets have become increasingly susceptible to price adjustments.

“As we move through the remainder of the year, local labor market dynamics and affordability constraints will continue to shape housing market performance as much as broader macroeconomic shifts, especially the direction of mortgage rates,” Hepp said.

In conclusion, Cotality forecasts that the behavior of local economies will shape the fragmented housing market of the nation, particularly as mortgage rates continue to be high.

To read the full report, click here.