A persistent shortage of housing, mostly starter homes, supported year‑over‑year growth
United States house prices hit a pause in February, offering little relief to borrowers already squeezed by higher mortgage costs and thin inventory.
The Federal Housing Finance Agency’s (FHFA) seasonally adjusted House Price Index showed no change on the month, with values up 1.7% from February 2025 to February 2026.
The South Atlantic division posted a 0.6% monthly gain while the Mountain division logged a 1.1% decline, underscoring how local supply constraints and migration patterns continued to reshape price trends.
Over 12 months, growth ranged from a 0.7% drop in the Mountain division to a 4.2% increase in the Middle Atlantic division.
The flat reading in house prices followed an upwardly revised 0.2% increase in January, the FHFA said, after previously reporting a 0.1% gain.
A persistent shortage of housing, mostly starter homes, supported year‑over‑year growth.
Mortgage financing costs also remained elevated. The average 30‑year fixed rate was reported to have dropped to 5.98% at the end of February. That's the first time mortgage rates dipped below 6% for the first time in three and a half years, offering a rare dose of relief to rate‑weary borrowers and rekindling hopes for a stronger spring homebuying season.
However, it jumped to 6.46% in early April and averaging 6.23% last week, due to the Iran conflict.
The FHFA HPI is a comprehensive collection of publicly available house price indexes that measure changes in single-family home values using a weighted repeat‑sales methodology based on Fannie Mae and Freddie Mac data. It covers all 50 states and more than 400 cities, with supplemental indexes drawing on FHA-insured loans, refinances and public records.
Cooling prices, but not much relief
Mark Hamrick, senior economic analyst at Bankrate, said the latest readings confirmed that the broader market has turned a corner.
Hamrick framed that shift as a mixed blessing for current owners. “For existing homeowners, the outlook is more sobering,” he said.
“On a national basis, home equity is now losing ground against inflation. The February data reveals a critical tipping point: more than half of major U.S. metropolitan markets now post year‑over‑year price declines. This broadening slowdown signifies that the correction is no longer localized to just a few pandemic‑era ‘hot spots.’”
A market of winners, losers and squeezed households
The gap between outperforming and lagging citiesalso widened, Hamrick said.
“The data highlights a significant regional divergence. The 7‑percentage point spread between a price gainer like Chicago (+5.0%) and a decliner like Denver (‑2.2%) illustrates a housing market of winners and losers,” he said.
“With inflation‑adjusted home values declining for nearly a year, most homeowners are no longer building customary wealth through their primary residence. Instead, they are navigating a squeeze.”
Hamrick added that surging consumer prices, exacerbated by global energy shocks, forced families to cut discretionary spending just to maintain necessities, while housing costs devoured a historically disproportionate share of the household budget.
Meanwhile, Mark Fleming, chief economist at First American, previously warned that “subdued” nominal growth could still mask a tougher backdrop for borrowers once inflation and rates are factored in.
“January’s data suggests that house price appreciation started 2026 much the way it ended last year – subdued,” he said.
“The era of rapid price acceleration is long past, replaced by a market with price changes essentially flat on an annual basis.”
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