Weekly Real Estate News
U.S. home prices increased 1.4% from a year earlier in August, extending a long stretch of subdued appreciation even as the national figure masks sharply different conditions across major housing markets.
The First American Data & Analytics Home Price Index rose 0.2% from July and 1.4% year over year. Annual appreciation has now remained below the index’s nearly three-decade pre-pandemic average of 3.4% for 17 consecutive months.
Yet prices remain far from inexpensive. First American said August home prices were approximately 80% above their pre-pandemic five-year average for the month.
“Annual house price growth remains in the low single digits and below its three-decade pre-pandemic average,” First American Chief Economist Mark Fleming said. He attributed the muted pace to a stalemate in which higher mortgage rates suppress demand while the mortgage-rate lock-in effect continues to constrain supply.
One national market, very different local outcomes
The more consequential story is underneath the national average. Chicago posted the strongest annual increase among the 50 large markets in First American’s expanded index at 5.5%, followed by Hartford, Connecticut, at 5.3%, New York at 5.2%, Milwaukee at 4.8% and Cleveland at 4.3%.
Several pandemic-era boom markets moved in the opposite direction. First American identified Dallas, Austin, San Antonio, Tampa and Denver among markets giving back some earlier gains. The divergence reinforces a pattern housing professionals have been confronting throughout 2026: national statistics increasingly describe an average that many local markets do not resemble.
The split also shows up by price tier. First American’s starter-home index recorded its strongest year-over-year gains in Cleveland at 5.5%, Philadelphia at 5.3%, Milwaukee at 5.2%, Grand Rapids at 5.1% and Pittsburgh at 5.0%.
That matters for affordability because lower-priced homes are the segment most relevant to many first-time and payment-sensitive buyers. Stronger appreciation at the entry tier can offset some of the benefit buyers might otherwise receive from slower overall price growth.
Rates remain the constraint
The report arrives after the average 30-year fixed mortgage rate climbed to 7.03% in Freddie Mac’s Sept. 24 survey. WRE News has been tracking the renewed pressure from rates and affordability, including Federal Reserve Governor Michael Barr’s recent warning that homeownership affordability has fallen to a 21-year low.
For sellers, low national appreciation means pricing power is weaker than it was during the pandemic-era surge. For buyers, however, slower appreciation does not automatically translate into affordability when financing costs remain elevated and prices begin from a much higher base.
First American’s updated index now covers the 50 largest core-based statistical areas and divides local transactions into starter, mid-tier and luxury segments. The company said the latest figures are subject to revision as additional transactions are recorded.
The next First American HPI release is expected during the week of Oct. 12.
