Cotality's May data reveals a market split by wealth, geography, and rate sensitivity
United States single-family home prices rose 0.8% year over year in May 2026, their strongest spring showing in more than a year, according to Cotality's Home Price Index released this week. Month over month, prices edged up 0.6% from April.
The data marks a meaningful reversal from last spring, when Cotality recorded a significant seasonal pullback and signals that buyers with the means to act are doing so, even with 30-year fixed rates hovering near 6.5%.
The recovery, however, is anything but uniform. Cotality Chief Economist Dr. Selma Hepp described the market as "firmly entrenched in a geographic split, shaped fundamentally by an affordability gap and a wealth gap that continues to divide buyers across the nation."
Buyers insulated from rate volatility, particularly those leveraging accumulated home equity, are driving outsized gains in high-value coastal markets, while rate-sensitive buyers remain largely sidelined.
Midwest holds the line
The most consistent price growth continues to come from the interior of the country. Illinois led all states with 5.9% annual appreciation in May, followed by Maine and Indiana at 5.6% each.
Spring momentum was equally strong at the metro level: Lake County, Ind., posted a 5.9% three-month gain, with Milwaukee, Wis., and Indianapolis, Ind., adding 4.8% and 4.7%, respectively.
For brokers working those corridors, the data reinforces what many have already observed on the ground.
Mike Fratantoni, chief economist at the Mortgage Bankers Association (MBA), previously told Mortgage Professional America that in more and more markets around the country, buyer-favorable conditions are now the norm, a forecast May's figures support in the Midwest more than anywhere else.
At the same time, some formerly hot markets are cooling sharply. Rochester, N.Y., posted a three-month price decline of -1.8%, the steepest drop among large metros.
New York City and Nassau County/Long Island still registered positive annual gains of 1.6% and 3.4%, respectively, but both recorded negative three-month price movements.
Tech wealth and a two-speed West Coast
On the opposite end of the spectrum, San Francisco posted the highest year-over-year appreciation among the 100 largest US metros at 8.9%, with 7.6 percentage points of that gain occurring in just the past 90 days.
Cotality attributed the surge to artificial intelligence investment and the wealth creation flowing from the tech sector.
Meanwhile, the Sun Belt's early-2020s boomtowns appear to be stabilizing rather than correcting. Austin, Texas, remains down 2.8% year over year, and Cape Coral–Fort Myers, Fla., is off 3.3%, but their three-month price changes have nearly flatlined at -0.01% and -0.13%.
Brokers in distressed Florida and California markets are already navigating the implications of sharply shifting affordability conditions for borrower conversations.
Cotality's forward projections point to a national annual gain of 4.8% by April 2027, suggesting the floor may be in. But with 72% of the 100 largest metros classified as overvalued — meaning price indexes exceed long-term values by more than 10% — and markets including Tampa, Fla., and Greenville, S.C., flagged as highest-risk for declines in the next 12 months, brokers should expect continued divergence.
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