Home prices rose in 78% of U.S. metropolitan areas during the third quarter of 2026, although that was slightly fewer than in the previous quarter.
The national median single-family home price reached $432,900, an increase of 1.7% from a year earlier, with some markets posting double-digit gains.
Housing affordability remains a major obstacle, particularly for first-time buyers, who are spending more than 36% of their income on mortgage payments.
The housing market may be struggling with high mortgage rates and affordability concerns, but home prices are still moving higher in most parts of the country, and that’s an often-overlooked headwind for buyers.
A new report from the National Association of Realtors (NAR) shows that home prices increased in 78% of the nation's metropolitan markets during the third quarter of 2026. That's down slightly from 80% in the second quarter, suggesting that price increases are becoming somewhat less widespread.
However, it also suggests that slowing home sales aren’t having much of an impact of prices. Nationally, the median price of an existing single-family home rose 1.7% from a year earlier to $432,900.
“Even with affordability challenges causing the housing market to stagnate, home prices continue to set record highs in most parts of the country,” said NAR Chief Economist Lawrence Yun.
Yun noted that homeowners have benefited significantly from rising property values. Over the past seven years, the average home has appreciated by $146,000, according to NAR.
For prospective buyers, however, those gains represent an increasingly expensive barrier to homeownership.
Where prices are rising fastest
Some of the strongest price increases are occurring in markets that have traditionally been more affordable than major coastal cities. The Gulfport-Biloxi-Pascagoula metropolitan area in Mississippi led the nation with an 11% year-over-year increase in median home prices.
Other markets posting substantial gains included:
Rochester, New York: 10.9%
Jackson, Mississippi: 10.1%
Beaumont-Port Arthur, Texas: 9.9%
York-Hanover, Pennsylvania: 9.2%
Grand Rapids-Wyoming, Michigan: 8.7%
Cleveland-Elyria, Ohio: 8.6%
Fort Wayne, Indiana: 8.5%
Despite those increases, the pace of appreciation is moderating nationally. Only 4% of metropolitan areas recorded double-digit price increases during the third quarter, compared with 5% in the previous quarter.
Meanwhile, 21% of markets experienced falling prices, up from 20% during the second quarter.
The Midwest remains relatively affordable
The report reveals significant differences in housing prices across the nation's four major regions. The Northeast recorded the largest annual price increase, with the median home price rising 4% to $561,500. The Midwest followed with a 3.6% increase, bringing its median price to $342,500, making it the most affordable region in the country.
In the South, home prices rose a more modest 1% from a year earlier, reaching a median of $374,900. The West was the only region to experience a price decline, with the median price slipping 0.6% to $629,000. Despite that decrease, the West remains the nation's most expensive housing region.
California continues to dominate the list of the nation's priciest housing markets. The San Jose-Sunnyvale-Santa Clara area had a median home price of $1.92 million, followed by Anaheim-Santa Ana-Irvine at $1.47 million and San Francisco-Oakland-Hayward at approximately $1.35 million.
Yun attributed some of the Bay Area's continued price strength to the artificial intelligence technology boom.
Some markets are recovering
One notable development involves Florida, where home prices had declined in numerous markets over the past year.
According to Yun, nearly all Florida markets recorded price increases during the third quarter.
He suggested that price declines in some markets could prove temporary, particularly where employment and local economic conditions remain strong.
That could disappoint buyers who have been waiting for a substantial housing market correction.
While some local markets are becoming more affordable, the national figures suggest that a widespread collapse in home prices has not materialized.
First-time buyers face the greatest pressure
Even where home price increases are slowing, the monthly cost of buying a house remains a significant obstacle.
NAR estimates that the monthly mortgage payment on a typical existing single-family home, assuming a 20% down payment, reached $2,251 during the third quarter. That's $48 more than in the previous quarter and $69 more than a year earlier.
For first-time buyers, the financial burden is especially severe. The typical starter home was valued at $368,000, with an estimated monthly mortgage payment of $2,208 assuming a 10% down payment.
That payment consumed an average of 36.3% of a first-time buyer household's income, up from 36% in the previous quarter, although slightly below the 37% recorded a year earlier.
These figures underscore how difficult it has become for younger households to enter the housing market, even in areas where prices are no longer rising rapidly.
What it means for buyers and sellers
The latest numbers present a mixed picture for consumers.
For existing homeowners, continued price appreciation means growing home equity, potentially providing greater financial flexibility. For sellers, the report suggests that property values remain relatively resilient, although conditions vary considerably by location.
Buyers, meanwhile, may find opportunities in markets where prices have begun to decline or where homes are taking longer to sell.
But waiting for prices to fall could be a gamble. In many markets, limited housing inventory and steady employment continue to support property values.
The report also highlights an important distinction: Slower home price growth does not necessarily mean homes are becoming cheaper. In most metropolitan areas, prices are still increasing, just at a more modest pace.
For prospective buyers, the more useful question may be whether their local market is becoming more affordable when home prices, mortgage rates, taxes, insurance and household income are considered together.
NAR's findings suggest that affordability, rather than a broad decline in home values, remains the defining challenge facing the U.S. housing market.