Prices reached a new peak in May even as annual appreciation stayed under 1%, First American data shows
National home prices touched a fresh historical high in May, even though year-over-year appreciation remained below 1% for a ninth straight month, according to First American Data & Analytics' latest Home Price Index.
The non-seasonally adjusted index rose 0.3% from April to May and 0.7% from a year earlier, the firm reported June 30.
A record built one month at a time
"National house prices are making history in slow motion," said Mark Fleming, chief economist at First American.
"While annual house price growth remains below 1 percent, the price level reached a new historical peak this month. Unlike the pandemic-era housing boom, when double-digit appreciation quickly pushed prices higher, today's record reflects the cumulative effect of small monthly gains rather than rapid price acceleration."
Fleming added that inventory, while higher than a year ago, has slowed its pace of growth and remains below pre-pandemic norms, limiting pressure on prices in either direction.
The April reading was also revised upward, from 0.2% to 0.5% month over month, suggesting the spring rebound was firmer than first reported.
For brokers, the pattern echoes a broader affordability trend. First American's Real House Price Index found real house prices fell 7.2% between April 2025 and April 2026, while consumer house-buying power rose 8.1% over the same period, as rising household income helped buyers absorb still-elevated costs.
The latest FHFA data shows home prices were essentially flat in April as elevated mortgage rates continued to limit transaction activity despite year over year price growth.https://t.co/jBDR9QD7AR
— Mortgage Professional America Magazine (@MPAMagazineUS) June 30, 2026
Luxury holds steady as starter homes diverge
The May report also found the luxury tier outperforming starter and mid-tier segments.
"Housing market divergence is not just a regional story — it's also a story of market segments," Fleming said.
"While many local markets continue to navigate affordability challenges, overall, the luxury tier has remained more resilient than the starter and mid-tier segments. Years of house price appreciation and stock market gains have boosted wealth for many higher-income households."
The price-tier breakdown underscored that split at the metro level. St. Louis posted the strongest starter-tier gain among major markets, up 8.6% year over year, even as its mid-tier homes slipped 1.5% and its luxury tier rose 3.6%.
Dallas showed the widest spread between segments: starter-tier homes there gained just 3.1%, while luxury-tier prices jumped 9.2%.
Chicago was the only major market to post solid gains across every tier, with starter homes up 4.8%, mid-tier up 4.4%, and luxury up 5.5%, making it the strongest-performing metro overall at 6.2% annual growth.
Pittsburgh followed at 2.6%, with Cambridge, Massachusetts (1.9%), New Brunswick, New Jersey (1.7%), and Anaheim, California (1.6%), rounding out the top five.
At the other end of the scale, Denver recorded the steepest annual decline among major metros at 2.5%, followed by Orlando, Florida (2.2%), Las Vegas (2.1%), Tampa, Florida (2.0%), and Oakland, California (1.7%).
Bruce Gehrke, senior director of wealth and lending intelligence at JD Power, previously told Mortgage Professional America that uneven conditions raise the value of brokers' local knowledge.
"I think brokers need to continue to focus on where their competitive advantage has always been," Gehrke said.
"That's more local, that's more personal, face-to-face with the borrower. I think that's still an advantage that they have."
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