Here's how much the US housing market shifted last quarter

Home prices rose in 80% of the 226 metropolitan areas tracked by the National Association of Realtors (NAR) during the second quarter of 2026, a meaningful uptick from 71% in the first quarter.

Sustained job growth absorbed elevated borrowing costs and kept buyer demand in play across much of the country.

The national median single-family existing-home price reached $434,900, a 1.5% year-over-year gain. That marks a sharp acceleration from the 0.5% annual gain posted in Q1 2026.

Five percent of metro areas recorded double-digit price appreciation, a share unchanged from the prior quarter.

"Home sales increased despite mortgage rates rising," said Dr. Lawrence Yun, chief economist at NAR in Washington, D.C.

"This testifies to the potential housing demand building up from steady job and income gains. Sales rose in three of the four major regions, with the South leading the way due to faster job growth."

Even as broader demand held up, NAR data showing pending home sales fell sharply in June underscores the fragility of that momentum as mortgage rates push higher into the second half of the year.

A two-speed market

The Northeast posted the highest median at $547,200, up 3.8% year over year, followed by the Midwest at $340,800, up 3.6%.

The South rose a more modest 1.0% to $380,000, while the West was the only region to record an annual price decline, slipping 0.8% to $637,900.

Yun attributed the Northeast's lag to slower job growth and prices that have risen faster than local affordability can support.

At the metro level, the Gulf Coast and northeastern secondary markets dominated the top-performers list.

Beaumont-Port Arthur, Texas, led all markets with an 11.0% year-over-year gain, followed by Naples-Immokalee-Marco Island, Florida, at 10.5%, and Gulfport-Biloxi-Pascagoula, Mississippi, at 10.3%.

At the opposite end, San Jose-Sunnyvale-Santa Clara, California, remained the country's most expensive market at a median of $2,050,000, though prices there fell 4.2% year over year. That's a signal that even the nation's priciest markets are not immune to rate-driven demand softening.

First-time buyers carry the heaviest load

The affordability figures that matter most to brokers are those affecting entry-level buyers, and Q2 delivered little relief on that front.

The typical monthly mortgage payment on an existing single-family home, assuming a 20% down payment, reached $2,199 in Q2. That's up $219 from the prior quarter, though still $52 below the year-ago level.

The average share of income that families devoted to mortgage payments climbed to 23.8%, up from 21.8% in Q1.

The strain is more pronounced among first-time buyers. A starter home priced at $369,700 with a 10% down payment carried a monthly payment of $2,158 — $214 more than the previous quarter. It consumed 35.9% of first-time buyer income, up from 32.9% in Q1 2026.

While that figure remains below the 38.4% recorded a year earlier, the quarter-over-quarter jump signals that the brief affordability window of late 2025 may be closing.

Analysis tracking how housing affordability continued to improve through mid-2026 suggests the income-price dynamic still favors buyers in aggregate — but rising rates are rapidly eroding that advantage at the entry level.

Yun was direct about the near-term outlook.

"It is welcoming to see incomes rising faster than home prices, which has helped boost affordability — but the big short-term challenge to affordability is coming from rising mortgage rates," he said.

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