Cotality data showed prices barely rising as regional gaps widened
Year‑over‑year US home price growth in February 2026 slowed to 0.5%, according to new figures from Cotality’s Home Price Index. It underscores a market that cooled from the pandemic run‑up and even from 2025’s muted finish.
The firm also reported that prices slipped 0.16% from January, setting a subdued tone heading into the critical spring buying season.
Midwest and Northeast held their ground
States such as New Jersey, North Dakota and Illinois led annual appreciation, helped by what the firm described as relative affordability and jobs in higher‑wage sectors, from biotech and medical research to financial services and green infrastructure.
In the Midwest, renewed manufacturing investment, CHIPS Act projects and renewable energy build‑outs supported demand, even as some buyers and employers continued to move inland from higher‑cost coastal hubs.
New Jersey led state‑level appreciation, with prices up 5.93% year over year, followed by North Dakota at 4.92% and Illinois at 4.83%.
Newark, N.J., posted a 6.7% gain among the 100 largest metros, trailed by Rochester, N.Y., at 6.3%.
Seven states, including Rhode Island, Idaho and New Jersey, set new price peaks in February.
At the same time, 13 states, plus Washington, D.C., logged annual price declines, led by the District at ‑3.01%, Florida at ‑2.30% and Montana at ‑1.52%.
Last year, softening conditions and insurance‑driven stress were seen in parts of Florida, particularly in condos. Local brokers warned of “a perfect storm” of higher costs and wavering demand in the state.
Overvaluation eased but did not vanish
Cotality estimated that 70 of the nation’s 100 largest metros remained overvalued in February, meaning local price indexes sat more than 10% above long‑term fundamentals. That marked an improvement from 83 overvalued metros a year earlier.
Markets along Florida’s Atlantic coast stayed at the top of Cotality’s 12‑month downside‑risk list, with several metros flagged for elevated odds of price declines.
Cotality’s baseline outlook called for national prices to rise 4.7% year over year by February 2027.
Local “price discovery” defined the spring
“These diverse trends indicate an ongoing process of price discovery—one where sales and comparisons remain limited—and underscore a market that is rebalancing locally rather than correcting nationally,” Cotality chief economist Selma Hepp said.
“Although the steady decrease in mortgage rates prior to the spring homebuying season raised hopes for a rebound in home prices and sales in 2026, the recent surge in rates has reduced demand in the housing market, shifting expectations for a broader recovery this year,” she said.
Other indicators supported that narrative of a slower, more locally driven market.
National Association of Realtors figures for February showed low‑single‑digit annual price growth, while recent Zillow data pointed to roughly 2% year‑over‑year gains and a modest pickup in new contracts despite volatile rates.
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