Affordability headwinds and plateauing inventory have US housing in a three-month price standoff
US home prices rose 1.0% year over year in July, marking a third consecutive month near that pace, according to First American Data & Analytics' Home Price Index (HPI).
The national housing market remains locked in a standoff, with buyers constrained by affordability and sellers unwilling to yield ground.
Prices also slipped 0.5% from June on a non-seasonally adjusted basis, while the May-to-June change was unrevised at 0.0%.
The July reading was slightly below the 1.2% annual appreciation recorded one year earlier, while prices dipped 0.5% from June on a non-seasonally adjusted basis. The May-to-June change was unrevised at 0.0%.
"Annual house price appreciation nationally held at approximately 1% in July, the third consecutive month at roughly this pace, as housing supply and demand remain locked near a stalemate," said Mark Fleming, chief economist at First American Data & Analytics in Santa Ana, California.
"The strong inventory gains from earlier this year have largely leveled off, while affordability challenges continue to limit demand. For now, neither buyers or sellers have enough leverage to break the stalemate to push prices decisively higher or lower."
The July data continues a pattern that emerged earlier this summer, when annual price appreciation hit its fastest pace since August 2025, a brief acceleration that has since flattened as inventory growth stalled and buyer demand remained constrained.
Mirror-image markets: Austin and Chicago
Chicago led all major markets with a 6.4% year-over-year gain in July, followed by Pittsburgh at 5.1%, New Brunswick, N.J., at 4.6%, Los Angeles at 2.9%, and Baltimore at 2.8%.
At the other end, Austin, Texas, posted a 2.9% year-over-year price decline, the steepest among tracked major metros. It is followed by Dallas at -2.5%, and Tampa, Fla., Denver, and Oakland each down 1.9%.
That Texas correction aligns with broader dynamics in Sun Belt markets, where homebuyer numbers have hit record lows as seller surplus continues to widen through the second half of 2026.
"In markets such as Austin, Texas, inventory remains elevated and prices continue to decline, even as inventory growth has recently turned negative," Fleming said.
"Chicago is nearly the mirror image: inventory remains constrained and prices are rising, even as inventory gradually improves."
| # | Metro area | YoY change | |
|---|---|---|---|
| 1 | Chicago, IL | +6.4% | |
| 2 | Pittsburgh, PA | +5.1% | |
| 3 | New Brunswick, NJ | +4.6% | |
| 4 | Los Angeles, CA | +2.9% | |
| 5 | Baltimore, MD | +2.8% |
| # | Metro area | YoY change | |
|---|---|---|---|
| 1 | Austin, TX | -2.9% | |
| 2 | Dallas, TX | -2.5% | |
| 3 | Tampa, FL | -1.9% | |
| 3 | Denver, CO | -1.9% | |
| 3 | Oakland, CA | -1.9% |
Starter homes offer pockets of strength
At the price-tier level, entry-level homes in several supply-constrained metros outperformed broader trends. New Brunswick, N.J., led all tracked markets with a 6.8% year-over-year starter-tier gain, followed by Pittsburgh at 6.0% and Baltimore at 4.7%.
Chicago and Minneapolis rounded out the top five at 3.8% and 3.7%, respectively.
For mortgage professionals advising purchase clients, the tier data points to continued demand pressure at entry-level price points, even as the national ceiling on appreciation holds.
In overbuilt Sun Belt metros, corrections that already show up in luxury home entry prices falling for a 29th consecutive month in July are increasingly visible across all price tiers, and broker strategy will need to reflect that split market reality heading into fall.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
