U.S. Home Prices Stagnate as Market Rebalances, with Regional Divergence and Risk of Further Declines in Florida

U.S. single-family home prices recorded a year-over-year increase of 0.5 percent in February 2026, but the housing market remains in a state of local rebalancing rather than national correction. Month-over-month, prices fell 0.16 percent from January, signaling continued instability in the broader market. The U.S. housing market is now characterized by sharp regional divergence, with the Midwest and Northeast showing stability while Florida and the D.C. metro experience sharp declines.

New Jersey and Illinois led regional growth, with year-over-year price gains of 5.93 percent and 4.83 percent, respectively, supported by strong employment in biotech, financial services, and green infrastructure. In contrast, Washington, D.C., Florida, and Montana saw the largest declines, with year-over-year price drops of 3.01 percent, 2.30 percent, and 1.52 percent, respectively.

Cotality forecasts annual U.S. home price gains to rise to 4.7 percent by February 2027, but for now, the market remains fragmented. Florida continues to top the list of regions at risk for price declines over the next 12 months, with five metro areas—Cape Coral–Fort Myers, Deltona-Daytona Beach-Ormond Beach, Lakeland–Winter Haven, Palm Bay–Melbourne–Titusville, and West Palm Beach–Boca Raton–Delray Beach—flagged as high risk.

According to Cotality’s Market Condition Indicators, 70 of the largest 100 U.S. metros are currently overvalued, meaning their home prices exceed long-term values by more than 10 percent. The next Cotality Home Price Index, featuring March 2026 data, will be released on May 5.