US Home Price Growth Slows: Cotality Sees 1.3% for 2026

Cotality's latest national home price insights paint a cooling picture. National single-family home price growth edged up to 1.7% year over year in August, from 1.6% in July. But after the climb in mortgage rates since August, Cotality's forecast now points to monthly price declines through the winter and smaller annual gains.

The outlook

• 2026 annual appreciation: expected to reach about 1.3%

• Near term: month-over-month declines through winter

• Demand signal: the report says buyer pullback is showing up in September's pending home sales

 

Where the market is moving

Cotality chief economist Dr. Selma Hepp says the core shift is away from the once-booming Sunbelt and West Coast, and towards cheaper, supply-constrained parts of the Midwest and Northeast. Even with 30-year mortgage rates spiking, buyers are looking for places where prices fit traditional debt-to-income limits.

Two forces pulling in different directions

Hepp describes a market split between short-term sensitivity to interest rates and long-term supply shortages. Where supply is tight, prices hold up. Where inventories are rising, new construction is arriving and job and population growth is slowing, prices are still searching for a bottom.