US Home Prices Up 1.3% as Sun Belt Corrections Continue

U.S. home prices rose 1.3% year-over-year between August 2025 and August 2026, according to Lance Lambert's ResiClub analysis of the Zillow Home Value Index. That marks a modest improvement from a year earlier, when the national year-over-year price change was -0.01%.

The pace of national softening has lost momentum over the past 12 months. On a nationally aggregated basis, the market has stabilized into what ResiClub describes as a soft, low-appreciation environment. But the firm cautions that the recent jump in long-term yields and mortgage rates could allow softening to regain momentum in the coming months.

Beneath the national average, the regional picture diverges sharply.

Markets in Texas, Florida and Colorado—states where inventory has risen above pre-pandemic 2019 levels—are still experiencing mild home price corrections. Tighter-inventory pockets of the Northeast and Midwest remain resilient, with prices likely pushing up modestly this year. San Francisco, and San Francisco proper in particular, is seeing notable upward pricing action this year, a shift ResiClub attributes to the AI wealth boom.

ResiClub's data covers the 50 largest metro housing markets, tracking both month-over-month shifts (July 2026 to August 2026) and year-over-year shifts (August 2025 to August 2026). The July-to-August window falls in a seasonally softer period for the nationally aggregated housing market.

The geographic split validates a call Lambert made back in spring 2022, when he wrote at Fortune that pandemic boomtowns like Austin faced the highest risk of home price corrections once the Pandemic Housing Boom ended—and named Chicago as his proxy for a lower-risk market this cycle.

That is exactly what has played out.

Since the post-Pandemic Housing Boom cooling began in mid-2022, the softest pockets of the country have concentrated in the Sun Belt and Mountain West. Many of those areas saw major price surges during the boom, stretching home prices against local incomes and adding upward pressure on carrying costs, including echo booms in insurance and property taxes. When pandemic-driven state-to-state migration slowed and mortgage rates rose, markets like Tampa and Austin had to rely more on local income levels to support frothy prices.

An abundance of new home supply accelerated the softening in the Sun Belt. Builders, where margins allow, have lowered prices or offered affordability incentives to maintain sales in a shifted market. That cooling extends to the resale side: buyers who previously would have considered existing homes have opted for new construction with more favorable deals, pushing resale inventory up and prices down further.

The Northeast and Midwest tell the opposite story. Softening there has been milder because those markets saw smaller price run-ups during the Pandemic Housing Boom and, therefore, less froth and overvaluation. They also benefited from the cyclical slowdown in state-to-state migration—ResiClub notes that if someone pauses a plan to sell in Illinois and buy in Florida, Illinois loses a listing while Florida loses a buyer. Lower levels of homebuilding and multifamily construction meant their resale markets also avoided additional cooling pressure from homebuilders and multifamily projects discounting heavily to move units.

Midwestern housing markets have outperformed since the Pandemic Housing Boom ended four years ago. The open question now, according to ResiClub, is whether that resilience is running into its limits and whether the Midwest is getting frothy—an issue the firm examined in a ResiClub PRO report this month.

The answer matters beyond the region. With mortgage rates rising again, the markets that held up best through the downturn may determine whether the national housing market's fragile stabilization holds through 2027.