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Annual appreciation hits its fastest pace since August 2025

Categories: Financial News, Real Estate + LendingPublished On: July 27th, 2026Comments Off24.1 min read

Evelle Dai

mortgage

Annual appreciation hits its fastest pace since August 2025
US home price appreciation accelerates as inventory momentum fades

Annual house price appreciation in the United States accelerated for the second consecutive month in May 2026, reaching its fastest pace since August 2025, according to the June 2026 Home Price Index (HPI) report from First American Data & Analytics, a division of First American Financial Corporation.

Despite the pickup, appreciation remained below 1% for the tenth straight month, with prices rising 0.3% from April to May.

The underlying shift is one brokers should watch closely. The inventory growth that had kept price appreciation in check over the past year is slowing. According to Mark Fleming, chief economist at First American Data & Analytics in Santa Ana, Calif., that dynamic is already reshaping the appreciation outlook.

“The housing market is quietly inching back toward price growth,” Fleming said.

“Annual appreciation reached its fastest pace since last August, while also becoming broader based, with more than half of the markets we track once again posting annual price gains. The key reason is that inventory growth has slowed, after a year of rising supply helped keep price appreciation in check.”

Where the gains are sharpest
The June 2026 HPI data reinforces how local the US housing story has become. Chicago posted the strongest year-over-year appreciation among the major markets tracked, at 6.2%, followed by Pittsburgh at 3.0%, Warren, Mich. at 2.8%, New Brunswick, N.J. at 2.4%, and Arlington, Va. at 2.2%.

At the starter-home tier — where broker transaction volumes tend to concentrate — St. Louis recorded a 12.4% year-over-year gain, the largest of any tracked metro.

Fort Worth, Texas followed at 6.1%. Fleming attributed the strength in supply-constrained markets to inventory that has yet to recover to pre-pandemic norms.

“Historically supply-constrained markets, such as Chicago, continue to post the strongest house price appreciation because inventory remains well below pre-pandemic norms,” he said.

On the other side of that divide, Denver posted a 2.6% annual price decline, the steepest among major metros.

Tampa (-1.8%), Oakland (-1.7%), Miami (-1.7%), and Las Vegas (-1.7%) also recorded year-over-year drops, reflecting markets where supply recovery has been more complete.

Supply divergence will set the second-half tone
Fleming flagged the second half of 2026 as the pivotal test for whether the current momentum holds.

“In the second half of the year, if supply stops improving while demand remains steady, home price appreciation is likely to continue gaining momentum,” he said.

“As the national inventory recovery levels off, these local differences in housing supply will increasingly determine where house price appreciation strengthens and where it stalls.”

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