U.S. home prices rose 1.4% in the year through August 2026 and 0.2% from July, leaving annual appreciation below its long-run pre-pandemic pace for a 17th consecutive month, First American Data & Analytics said in its monthly Home Price Index report released Sept. 28, 2026.
The benchmark the firm measures against is 3.4%, the average annual gain over nearly three decades before the pandemic. By the report’s count, national growth has now run below that mark for 17 months straight.
What the national number hides is a country pulling in two directions. Among the 50 largest metropolitan markets the index now covers, the report’s leading metros all gained more than 4% while its list of declining markets is led by a 5% drop, and the geography of the split is clean: the gainers sit in the Midwest and Northeast, the decliners in the Sun Belt and Mountain West.
Chicago up 5.5%, Dallas down 5%
Chicago led all metros at plus 5.5% year over year, followed by Hartford, Conn., at 5.3%, New York at 5.2%, Milwaukee at 4.8% and Cleveland at 4.3%.
At the other end, Dallas prices fell 5.0% β the steepest decline of any large market β with Austin, Texas down 3.4%, San Antonio down 2.9%, and Tampa, Fla. and Denver each down 1.9%.
“The national house price growth number masks a significantly divided housing market,” Mark Fleming, First American’s chief economist, said in the report. “Chicago, Hartford, Conn., and New York are leading the nation, with the strongest annual gains concentrated in the Northeast and Midwest. By contrast, several Sun Belt and Western markets are giving back some of their pandemic-era gains.”
Fleming framed the declines as a correction rather than a break: “These declines reflect a broader market rebalancing after years of rapid growth. Although price declines can be difficult for homeowners, they may help improve affordability and create a healthier path back toward balance for buyers and sellers.”
The gap between the fastest and slowest large markets in August is 10.5 percentage points, from Chicago’s 5.5% gain to Dallas’s 5.0% decline. A regional divide of that order has been visible in the firm’s readings for months; it was the story of the June index as well.
Entry-level homes are still the tightest market
The index splits each metro’s sales into starter, mid and luxury thirds, and in the markets with the fastest starter-tier growth the bottom of the market is outrunning the middle by a wide margin.
Cleveland starter homes gained 5.5% against 3.6% for the mid-tier. Philadelphia’s starter tier rose 5.3% versus 3.0% in the middle. Pittsburgh showed the widest gap of the five: 5.0% at the starter level against 2.7% mid-tier and 2.6% luxury. Milwaukee (5.2% starter, 4.0% mid, 5.4% luxury) and Grand Rapids, Mich. (5.1%, 3.9%, 3.6%) rounded out the list.
The report does not say why the bottom of the market is running hardest, and First American offers no metro-level explanation. On our reading it is consistent with the supply side of Fleming’s stalemate: entry-level homes are both what constrained buyers can still afford and the segment whose owners are most likely to be holding a pandemic-era mortgage they will not give up.
Rates on one side, lock-in on the other
Fleming attributed the subdued national figure to two forces canceling each other out. “Higher mortgage rates are weighing on demand, while the mortgage-rate lock-in effect continues to limit supply,” he said. “For now, that stalemate is keeping home price growth steady, but subdued.”
That description lines up with what Federal Reserve officials have been saying about the same market. Fed Governor Michael Barr has said home affordability has reached a 21-year low and that further rate increases are likely.
The report also notes that despite the slowdown, house prices in August remained roughly 80% above their pre-pandemic five-year average for the month β a reminder that flat-to-negative annual readings are coming off a very high base.
Reading it against the other indexes
Different home-price indexes are currently telling noticeably different stories about the same month, and the gap is methodological rather than contradictory. Redfin’s index put August prices up 3.7% year over year, more than double First American’s 1.4%, while agreeing that several Texas metros fell.
First American’s index uses a repeat-sales method, comparing later sales of the same properties against more than 46 million paired transactions going back to 1990, and excludes real-estate-owned sales. It is not seasonally adjusted, and the company cautions that recent months are revised as more transactions are recorded. Readers comparing month-to-month figures across providers should check which method produced each one.
Beginning with this edition, First American expanded the index to cover the top 50 housing markets at the metropolitan level and made what it called broader methodological updates, so month-over-month comparisons of its metro rankings with earlier reports are not strictly like for like.
The next release is scheduled for the week of Oct. 12, 2026. More housing market coverage is on RealtyWire.
