The pace of home-price growth accelerated in May after slowing for the previous two years as buyer demand is “aggressively testing the constraints of elevated mortgage rates,” Cotality said in its monthly Home Price Insights report. 

The median home price of $424,950 represented an acceleration from 0.6% year-over-year growth in April to 0.8% growth in May. Looking ahead, Cotality expects home prices to rise another 4.8% between May 2026 and May 2027. 

“The U.S. housing market in mid-2026 remains firmly entrenched in a geographic split, shaped fundamentally by an affordability gap and a wealth gap that continues to divide buyers across the nation,” said Cotality Chief Economist Selma Hepp. 

The topline national number belies the regional variation in markets. In the relatively affordable Midwest, budget friendly pricing is fueling price increases, as buyers leave expensive coastal markets for the interior of the country and its lower barriers to entry. Meanwhile, markets that experienced the sharpest growth in recent years are entering a cooling phase, and the boomtowns in the South have largely discovered their price floors by now. 

“What we are witnessing is a profound segmentation of opportunity,” Hepp explains. “Buyers who are well-insulated from mortgage rate volatility — bolstered by substantial accumulated home equity and robust wealth gains — are continuing to look at high-value regions like San Francisco, driving a strong near-9% annual rebound in a market that remains fundamentally healthy and structurally undervalued relative to long-term income baselines.”