U.S. House Price Appreciation Slows from Rapid Pandemic Era Pace

House appreciation slowed from its rapid pandemic-era boom as U.S. house prices continued to rise in the first quarter of 2026. Higher mortgage rates, persistent affordability challenges and softer demand weighed on price growth nationally. Local market conditions varied, with some states and metro areas seeing solid gains while others saw declining or flattening house prices.

National house prices rose 1.7% in the first quarter of 2026 compared to a year prior, according to the quarterly purchase-only House Price Index released by the Federal Housing Finance Agency. That was the slowest annual appreciation since the second quarter of 2012, signaling a continued cooling of house price growth.

Which states and territories saw the strongest annual house appreciation gains in the first quarter of 2026?

• Puerto Rico recorded the strongest gains with house prices rising 16.3% from the previous year
• Illinois posted the next-largest gain at 7.3%, followed by Alaska (5.5%), Vermont (4.9%) and Connecticut (4.7%)
• Many states in the Midwest and Northeast outperformed the national average

Which states and territories saw annual house declines in the first quarter of 2026?

• Colorado saw a 2.4% drop from a year prior while Texas and the District of Columbia also posted modest declines. Western and Sun Belt states saw mostly limited appreciation
• In total, 42 states and Puerto Rico reported house price gains with 31 of those states exceeding the national appreciation rate of 1.7%
• That underscores the resilience of many regional housing markets despite the challenging financing conditions faced

How did metro areas’ house appreciate rates fare in the first quarter of 2026?

• The strongest-performing areas were mostly in the Midwest and Northeast including New York, Pennsylvania, Ohio and Illinois, supported by a limited available housing supply.
• The weakest-performing markets included 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.
• Overall, one-third of the 100 largest metro areas posted annual price declines in the first quarter of 2026, with two-third recording either positive appreciation or flat growth.

For a more detailed breakdown, read more from NAHB economist Jing Fu in NAHB’s Eye on Housing.