Home Prices Rise in 78% of U.S. Metro Areas Despite Affordability Strain

Home prices rose in 78% of the U.S. metropolitan markets tracked by the National Association of Realtors during the third quarter of 2026, extending a broad run of price gains even as buying a home remained difficult for many households. The share of markets with annual increases eased from 80% in the second quarter, but the nationwide median price of an existing single-family home still rose 1.7% from a year earlier to $432,900.

The figures, released October 29, point to a housing market in which slower sales and stretched budgets have not translated into widespread price declines. Price growth remains modest at the national level, yet conditions vary sharply by region and by metropolitan area. That makes the headline number useful as a measure of how widely prices are rising, rather than a description of what any individual buyer can expect.

The association’s third-quarter housing analysis covers roughly 235 metro areas. It found that 4% of the markets recorded double-digit annual gains, down from 5% in the previous quarter. At the other end of the market, 21% posted price declines, compared with 20% in the second quarter. The shifts are small, but they show that price increases are not becoming uniformly stronger.

Mortgage Payments Keep Affordability Under Pressure

The national price increase came alongside higher costs for a typical mortgage payment. NAR estimated that a family purchasing an existing single-family home with a 20% down payment faced a monthly mortgage payment of $2,251 in the third quarter. That was $48 more than in the second quarter and $69 more than a year earlier.

Those payment estimates help explain why a market can show widespread price appreciation without a corresponding surge in purchases. Buyers must qualify for a loan and manage a monthly obligation, not just find a listing with a price they consider reasonable. Even modest changes in the price of a home can matter when financing costs already absorb a large portion of a household’s budget.

For the typical family in NAR’s affordability calculations, the mortgage payment represented 24.1% of income. That compared with 23.9% in the second quarter and 24.5% a year earlier. The year-over-year reading suggests some improvement from last year, but the quarter-to-quarter increase shows that affordability had not been moving consistently in buyers’ favor.

First-time buyers faced a heavier burden. NAR modeled a typical starter home at $368,000 with a 10% down payment and calculated a monthly mortgage payment of $2,208. The payment consumed 36.3% of first-time-buyer income, up from 36.0% in the second quarter, although below the 37.0% share recorded a year before. The lower down payment means a smaller purchase price does not necessarily translate into a much smaller mortgage bill.

Borrowing rates were also elevated after the quarter ended. In its October 22 mortgage-rate survey, Freddie Mac reported an average 30-year fixed rate of 7.32%, compared with 6.19% at the same point a year earlier. That weekly rate is not the rate assumed in NAR’s quarterly payment estimates, but it illustrates the financing backdrop facing people trying to buy in the fall.

Affordability figures are estimates for specified home prices and down payments, not the amount every buyer will actually owe. Local taxes, insurance costs, loan terms and household finances can change the total cost of ownership substantially. The comparison nevertheless shows why prices can remain firm even as a sizable group of prospective buyers finds it difficult to enter the market.

Northeast and Midwest Lead Regional Price Growth

The Northeast recorded the strongest regional increase in the third quarter, with its median existing single-family home price rising 4.0% from a year earlier to $561,500. NAR has pointed to tight housing inventory as an important constraint in the region. Limited choices can help support prices even when higher mortgage payments are discouraging some purchases.

The Midwest followed with a 3.6% annual gain and a median price of $342,500. It remained the least expensive of the four major regions on NAR’s measure. That matters for buyers comparing markets because the gap between regional price levels is large, even before accounting for differences in wages, taxes and financing costs.

In the South, the median price rose 1.0% to $374,900. The West moved in the opposite direction, with a 0.6% annual decline to $629,000. The West still had the highest regional median despite its slight retreat. A decline in the regional figure, therefore, should not be confused with a return to broadly affordable prices in its most expensive cities.

Some of the nation’s highest-priced metropolitan areas continued to appreciate. The San Jose-Sunnyvale-Santa Clara area had a median price of $1.92 million, up 0.3% from a year earlier. Anaheim-Santa Ana-Irvine reached $1.47 million, an increase of 5.0%, while San Francisco-Oakland-Hayward stood at about $1.35 million, up 2.7%. Those figures show how different local markets can be from the regional average.

Lawrence Yun, NAR’s chief economist, attributed some of the Bay Area’s enduring price strength to demand associated with the artificial intelligence industry. That is the association’s assessment of local conditions rather than a claim that one industry explains every home sale. Across the country, employment, the supply of homes for sale and local buyer incomes continue to shape very different price outcomes.

Local Gains and Declines Reveal an Uneven Market

The largest yearly gains among the larger metro markets highlighted by NAR were not confined to the country’s most expensive areas. Gulfport-Biloxi-Pascagoula, Mississippi, led with an 11.0% increase, followed by Rochester, New York, at 10.9% and Jackson, Mississippi, at 10.1%. Beaumont-Port Arthur, Texas, was close behind at 9.9%. These results contrast with the relatively restrained 1.7% national price increase.

Price declines were also meaningful in some places. The Salinas-Monterey market in California, for example, remained among the nation’s most expensive metros, with a median sales price of $948,900, but its median was 7.0% below the level a year earlier. A high price level and a negative annual growth rate can coexist, just as a comparatively affordable market can experience rapid percentage gains.

Florida offers another illustration of how local conditions can change. After declines in many of its markets over the preceding year, NAR said prices were rising in nearly all the state’s tracked metros in the third quarter. Yun cautioned that declines in otherwise healthy local economies may be brief. That is a conditional judgment, not a guarantee that prices will keep rising or that markets facing weaker employment will recover quickly.

One qualification is especially important when interpreting these figures: they measure the median prices of homes that actually sold, not the change in value of a fixed set of identical houses. The mix of properties sold can change from quarter to quarter, affecting the median. NAR also cautions against reading a change in the national median between consecutive quarters as a clean price movement because housing sales have a strong seasonal pattern.

Price resilience has coincided with sluggish sales. NAR’s separate figures for September showed existing-home sales running at an annualized pace of 3.99 million, with 1.60 million homes on the market, equivalent to 4.8 months of supply. That monthly sales series includes condos and co-ops, unlike the single-family price medians in the quarterly report, so the two measures are not directly interchangeable. They describe different sides of the market: the pace of sales and the prices achieved by homes that sold.

The next immediate check on housing demand will come from NAR’s October existing-home sales report, scheduled for November 12. It will provide a more recent measure of sales activity as borrowers respond to mortgage rates and local inventory, while the metro price figures remain a quarterly snapshot of what sold during July through September.