U.S. house prices continued to rise in the first quarter of 2026, but appreciation slowed markedly from the rapid pace seen during the pandemic-era housing boom. Higher mortgage rates, persistent affordability challenges, and softer demand weighed on price growth nationally. At the same time, local market conditions varied considerably. Some states and metropolitan areas continued to post solid gains, while others experienced flat or declining house prices.

According to the quarterly purchase-only House Price Index¹ (HPI) released by the Federal Housing Finance Agency (FHFA), national house prices rose 1.7% in the first quarter of 2026 from a year earlier. This growth rate represented the slowest annual appreciation since the second quarter of 2012, signaling the continued cooling of house price growth after more than a decade of strong gains. On a quarterly basis, house prices increased a modest 0.5% from the fourth quarter of 2025.

The FHFA’s purchase-only HPI tracks average price changes using more than six million repeat-sales transactions involving the same single-family properties. In addition to the national picture, the index provides valuable insight into house price trends across states and metropolitan areas.

At the state level, house price performance remained positive across most of the country in the first quarter of 2026, although appreciation rates varied widely. Annual appreciation ranged from a 2.4% decline to a 16.3% gain.

Puerto Rico recorded the strongest annual appreciation, with house prices surging 16.3% from a year earlier. Among the 50 states and the District of Columbia, Illinois posted the largest gain (7.3%), followed by Alaska (5.5%), Vermont (4.9%), and Connecticut (4.7%). More broadly, many states across the Midwest and Northeast continued to outperform the national average.

At the other end of the spectrum, Colorado recorded the largest annual decline, with house prices falling 2.4% from a year earlier. Texas and the District of Columbia also posted modest declines, while several Western and Sun Belt states saw only limited appreciation. Many of the markets that experienced some of the strongest price growth during 2021–2022 continue to face affordability pressures and softer buyer demand.

Overall, 42 states and Puerto Rico reported annual house price gains. In addition, 31 states and Puerto Rico matched or exceeded the national appreciation rate of 1.7%, underscoring the resilience of many regional housing markets despite challenging financing conditions.

House price performance varied even more widely across metropolitan areas than at the state level. Among the nation’s 100 largest metro areas tracked by FHFA, annual house price appreciation ranged from a decline of 6.9% to an increase of 10.8% in the first quarter of 2026.

The strongest-performing metro areas were concentrated primarily in the Midwest and Northeast, where limited housing supply continued to support price growth. Several metro areas in Pennsylvania, New York, Ohio, and Illinois posted especially strong annual gains, reflecting continued demand amid limited supply.

In contrast, some of the weakest-performing markets were located in Florida, Texas, and parts of the Mountain West. Austin-Round Rock-San Marcos, Texas, recorded the steepest annual price decline among the top 100 metro areas, continuing a correction after several years of exceptionally rapid house price growth. Cape Coral–Fort Myers, Florida, also remained among the nation’s weakest housing markets, extending a trend of price declines amid cooling demand and a gradual rebalancing of market conditions.

Overall, one-third of the 100 largest metro areas posted annual price declines in the first quarter of 2026, while the remaining two-thirds recorded either positive appreciation or essentially flat price growth.

Note:

1. Unless otherwise noted, this blog post uses the quarterly purchase-only House Price Index (HPI), which measures the sales prices of homes that are bought and sold, rather than the broader all-transactions HPI. The purchase-only HPI provides a more precise view of current market conditions.