Home-price growth continued to slow in 2026, according to the latest Cotality data, pointing to the oh-so awaited beginnings of market stabilization the industry has been craving.
Cotality’s Home Price Index™ for January found that year-over-year home-price growth was only 0.74% in January, and prices fell 0.1% month-over-month from December 2025.
Regionally, the results are a bit more varied. The North and the Midwest continue to see growth despite the national trend, led by New Jersey (+5.6%) and Connecticut (+5.26%), Illinois (+4.91%), Wisconsin (+4.78%) and Nebraska (+4.75%).
On the other hand, the West and parts of the South are seeing deceleration, as 11 states (including Washington, D.C.) across the regions saw negative home-price appreciation. These losses were led by Florida (-2.36%), Colorado (-1.31%), Hawaii (-1.11%), Utah (-1.11%) and Texas (-1.09%).
This data “reveals a ‘two-speed’ housing market,” according to Cotality Chief Economist Dr. Selma Hepp.
“While high-cost coastal and sunbelt regions are undergoing price corrections, the Midwest and Northeast are proving remarkably resilient due to their relative affordability and stable employment bases,” she continued.
To add to the imbalance, Cotality’s Market Condition Indicators reported that 69 of the 100 largest metros are currently overvalued (their current home price indexes exceed their long-term values by greater than 10%).
“Ultimately, locations with consistent job growth will remain the primary engines for price appreciation, but they also have larger inventory deficits, which are driving pressure on home prices,” added Hepp.
Looking ahead, Cotality has forecasted annual price growth to clock in at 4.4% year-over-year as of January 2027.
In addition, Cotality’s Market Risk Indicators report that the top markets at risk for price declines in the next 12 months are all in Florida: Cape Coral–Fort Myers, Deltona-Daytona Beach-Ormond Beach, Lakeland–Winter Haven, Palm Bay–Melbourne–Titusville and West Palm Beach–Boca Raton–Delray Beach. The report also noted that cities like Los Angeles, New York City, San Francisco and Honolulu could see rebounds in 2027.
