Where Home Prices Rose (and Fell) the Most in 2026, and Where Phoenix Fits

Scroll through YouTube or X long enough and you will run into at least one video promising that a housing crash is right around the corner. Some of them sound convincing. The actual data tells a much calmer story.

Home prices climbed 2.1 percent nationally over the past year, according to the Federal Housing Finance Agency, and they rose in 46 states plus Washington, D.C. The interesting part is how uneven that growth is. A handful of states are up 5 to 8 percent, a few are slightly down, and Arizona is sitting almost exactly in the middle at close to flat. Below I break down where prices rose and fell the most at the state and metro level, why, and what the Phoenix numbers actually look like right now so you can make a decision based on data instead of headlines.

What is happening to home prices right now?

National home prices are up 2.1 percent year over year as of the second quarter of 2026, and up 0.3 percent from the previous quarter. That is a slightly faster annual pace than the start of the year, and it is the slowest annual growth in roughly a decade, which is exactly what a market settling into a steadier rhythm looks like.

Two more numbers worth knowing from the same FHFA report: prices have risen every single quarter since 2012, and only four states posted an annual decline this year. Higher mortgage rates and affordability pressure have slowed things down. They have not reversed the trend in most of the country.

States where home prices are rising (and falling) the fastest

Some states are seeing much bigger gains than others. Here are the ten states with the strongest annual price growth as of Q2 2026:

1. Alaska: up 8.3%
2. Vermont: up 7.3%
3. Hawaii: up 5.8%
4. Illinois: up 5.6%
5. West Virginia: up 5.6%
6. Wisconsin: up 4.8%
7. North Dakota: up 4.8%
8. Connecticut: up 4.7%
9. Rhode Island: up 4.7%
10. New Jersey: up 4.6%

Notice the pattern. Most of these are Midwest and Northeast markets where there are not enough homes for sale to keep up with buyer demand, so prices keep grinding higher.

Home prices fell in four states over the same year:

1. New Mexico: down 1.2%
2. Washington: down 0.9%
3. Colorado: down 0.5%
4. California: down 0.2%

And a handful of states grew by less than 1 percent, including Oregon, North Carolina, Texas, Mississippi, and Arizona at 0.6 percent. These are largely the same Sun Belt and Western markets that saw explosive growth during the pandemic. They are not collapsing. They are catching their breath after running ahead of incomes for several years.

Cities where home prices are rising (and falling) the fastest

Metro-level numbers swing more than state numbers. The ten metros with the biggest annual gains:

1. Elgin, IL: up 7.7%
2. Allentown-Bethlehem-Easton, PA-NJ: up 7.0%
3. Bridgeport-Stamford-Danbury, CT: up 6.6%
4. Charleston-North Charleston, SC: up 6.5%
5. El Paso, TX: up 6.5%
6. Milwaukee-Waukesha, WI: up 6.1%
7. Chicago-Naperville-Schaumburg, IL: up 5.9%
8. New York-Jersey City-White Plains, NY-NJ: up 5.6%
9. Newark, NJ: up 5.5%
10. Greensboro-High Point, NC: up 5.3%

And the ten metros with the biggest annual declines:

1. Everett, WA: down 3.7%
2. San Antonio-New Braunfels, TX: down 3.0%
3. Bakersfield-Delano, CA: down 2.6%
4. Seattle-Bellevue-Kent, WA: down 2.4%
5. San Francisco-San Mateo-Redwood City, CA: down 2.4%
6. Tucson, AZ: down 2.2%
7. Albuquerque, NM: down 1.7%
8. San Jose-Sunnyvale-Santa Clara, CA: down 1.6%
9. Washington, DC-Maryland: down 1.0%
10. Denver-Aurora-Centennial, CO: down 1.0%

Two things jump out for those of us in Arizona. First, Tucson made the bottom ten, which is a reminder that "Arizona" is not one market. Second, Phoenix did not make either list, which fits what I am seeing on the ground: a big, balanced metro that is neither surging nor sliding.

One caution on reading these numbers: short time frames jump around. San Francisco dropped 9.1 percent from the prior quarter even though its year-over-year change was only down 2.4 percent. The annual comparison is the one to trust.

Why some markets are heating up and others are cooling off

Two forces explain most of what you see above.

Affordability. Buying a home costs more than it used to, between prices and rates, and that is pushing some buyers to wait or step back. The effect is strongest in expensive markets like California and the Pacific Northwest, where prices had already run far ahead over the past several years.

Housing supply. In much of the Midwest and Northeast there simply are not enough homes for sale to meet demand. When supply is tight, prices hold or climb. That is why Illinois, Wisconsin, and Connecticut keep showing up near the top of the growth list.

Arizona and Oregon are dealing with a different mix. Prices climbed fast here during the pandemic, inventory has rebuilt significantly since, and affordability has not fully caught up. The result is a market that is flat rather than falling.

What this means for Phoenix

Here is where I always tell buyers and sellers to look at our own numbers rather than national headlines.

Greater Phoenix market snapshot (as of September 6, 2026, all home types, Cromford Report):

• Median sale price over the past 12 months: $450,000, essentially unchanged from $449,995 a year ago.
• Price per square foot is up about 1.6 percent year over year, so buyers are paying slightly more per foot while the headline median holds flat.
• About 27,000 active listings, roughly even with last year, and 4.1 months of supply, up from 3.8. That is a balanced market that leans toward buyers.
• Median 88 days on market for homes that sell, and about two out of three listings are selling successfully.
• Sellers are netting about 97.4 percent of list price on average.
• Cromford Market Index: 80.1, which Cromford classifies as a buyer's market (100 is balanced).

Translation: Phoenix home prices have gone essentially sideways over the past year. That lines up with the FHFA reading of Arizona at plus 0.6 percent. It is not a crash, and it is not the 2021 rocket ship either. It is a normal market with more choice, longer timelines, and real negotiating room.

If you are selling in Phoenix, flat prices and 4.1 months of supply mean pricing correctly on day one matters more than it has in years. Homes priced to today's market are still selling at a strong percentage of list. Homes priced to 2022 are sitting, and about one in three listings is coming off the market unsold. Strategy and marketing exposure are doing the heavy lifting right now.

If you are buying in Phoenix, this is the most negotiating room buyers have had in a while. More inventory, longer days on market, and sellers who are increasingly open to concessions on price, closing costs, and rate buydowns. You still need to move decisively on a well-priced home in a strong neighborhood, because those are the ones that still draw multiple offers, but you are no longer competing in a frenzy.

And remember that no two neighborhoods tell the same story. Within the Valley, some zip codes are up a few percent this year and others are down a few percent. Your street, your school boundaries, your home type, and your price band all matter more than the metro-wide number.

Frequently asked questions about home prices in 2026

Are home prices dropping in 2026?

Nationally, no. FHFA data shows prices up 2.1 percent year over year through the second quarter of 2026, with increases in 46 states. Only four states (New Mexico, Washington, Colorado, and California) posted small annual declines.

Are home prices dropping in Phoenix?

Phoenix prices are essentially flat. The 12-month median sale price is $450,000, unchanged from a year ago, while price per square foot is up about 1.6 percent. Arizona as a whole is up 0.6 percent per FHFA. Some individual neighborhoods are up and some are down.

Which states have the fastest rising home prices?

Alaska (8.3 percent), Vermont (7.3 percent), Hawaii (5.8 percent), Illinois (5.6 percent), and West Virginia (5.6 percent) led the country for annual appreciation as of Q2 2026, followed by Wisconsin, North Dakota, Connecticut, Rhode Island, and New Jersey.

Is the housing market crashing?

The data does not support that. Prices have risen every quarter since 2012 and are still rising in most of the country. What is happening instead is a slowdown, with the fastest pandemic-era markets like Arizona, Texas, and parts of the West settling into flat or slightly negative territory while supply-constrained markets keep climbing.

Is it a buyer's market or a seller's market in Phoenix right now?

Cromford's Market Index sits at 80.1, which is buyer's market territory, and months of supply is at 4.1. In practical terms, buyers have more selection and leverage than they have had in several years, while well-priced homes in desirable areas still sell at close to list.

Want to know what your Phoenix home did this year?

Every homeowner's number is different, and the metro-wide figure will not tell you what your specific home is worth today. If you want a real answer, I will pull the closed sales in your neighborhood and show you exactly where your value stands and how much equity you have gained since you bought.

Book a strategy call with me and my team through the link in bio, or send me a message with your zip code and I will send over a custom market breakdown.

Caitlin McKeague, Associate Broker, Desert Dreamers Real Estate, brokered by Real. Serving Phoenix, Scottsdale, Paradise Valley, and the surrounding Valley.