U.S. house prices continued to rise in the second quarter of 2026, with most states and metropolitan areas recording annual gains. Elevated borrowing costs and affordability constraints remained important headwinds, while limited housing supply continued to support prices in many markets, particularly across parts of the Midwest and Northeast.
According to the Federal Housing Finance Agency’s (FHFA) quarterly purchase-only House Price Index (HPI), national house prices increased 2.1% in the second quarter of 2026 from a year earlier. This was slightly faster than the 1.9% annual gain reported for the first quarter. On a quarter-over-quarter basis, house prices rose 0.3%, moderating from the 0.6% increase in the previous quarter.
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. Among the 50 states and the District of Columbia, 47 states recorded year-over-year gains, while four posted declines. Thirty states matched or exceeded the national appreciation rate of 2.1%. Puerto Rico also registered an annual increase.
Alaska led the nation, with house prices rising 8.3% from a year earlier. Vermont followed with a 7.3% gain, while prices increased 5.8% in Hawaii. Illinois and West Virginia each posted gains of approximately 5.6%.
Other strong-performing states included Wisconsin and North Dakota, where prices rose about 4.8%, followed by Connecticut, Rhode Island, and New Jersey. Although the strongest gains were not concentrated in a single region, many Midwest and Northeast states continued to outperform the national average.
At the other end of the spectrum, New Mexico recorded the largest annual decline, with house prices falling 1.2%. Washington declined 0.9%, Colorado fell 0.5%, and California edged down 0.2%.
Several other states, including Oregon, North Carolina, Texas, Mississippi, and Arizona, recorded annual appreciation of less than 1%. These results point to continued softness in several Western and Sun Belt markets, including some areas that experienced rapid price growth during the pandemic-era housing boom.
Quarterly performance was similarly uneven. Hawaii recorded the largest quarter-over-quarter increase at 4.7%, followed by Rhode Island at 2.4%. Conversely, Puerto Rico declined 2.6% from the first quarter, while New Mexico fell 1.7%.
House price performance varied even more widely across the nation’s 100 largest metropolitan areas. Annual house price appreciation ranged from a decline of 3.7% to an increase of 7.7% in the second quarter of 2026.
Overall, 75 of the 100 metro areas posted year-over-year gains, while 22 recorded declines and three remained unchanged. Forty-nine metros matched or exceeded the national appreciation rate of 2.1%.
Elgin, Illinois, recorded the strongest annual appreciation among the 100 largest metros, with prices rising 7.7%. Allentown-Bethlehem-Easton, Pennsylvania–New Jersey, followed with a 7.0% increase.
Chicago, New York, Newark, and Greensboro rounded out the ten strongest annual performers. The rankings indicate continued strength in several Midwest and Northeast markets, where relatively limited housing supply may be helping support prices.
The weakest results were concentrated in portions of the West and Southwest. Everett, Washington, posted the largest annual decline at 3.7%, followed by San Antonio-New Braunfels, Texas, at 3.0%.
Bakersfield-Delano, California, declined 2.6%, while Seattle and San Francisco each fell approximately 2.4%. Tucson, Albuquerque, San Jose-Sunnyvale-Santa Clara, Washington, D.C.–Maryland, and Denver-Aurora-Centennial were also among the ten weakest-performing large metro areas.
Short-term changes sometimes diverged considerably from annual trends. Allentown posted a 4.3% quarterly increase, while Austin rose 3.7% from the first quarter despite a slight year-over-year decline.
By contrast, San Francisco posted a 9.1% quarter-over-quarter decline, the largest quarterly decline among the 100 metros, followed by Tucson at 5.3% and San Jose at 3.6%.
These large quarterly movements highlight the greater volatility in metro-level house price data. While year-over-year changes provide a better indication of underlying price trends, quarterly measures can help identify more recent shifts in local housing market conditions.
Note:
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. Year-over-year change compares 2026 Q2 with 2025 Q2, while quarter-over-quarter change compares 2026 Q2 with 2026 Q1.
This article was originally published by a eyeonhousing.org . Read the Original article here. .
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Rug: Armadillo; chair upholstery: Rose Tarlow