Northeast and Midwest lead U.S. home-price gains in September, Cotality says

U.S. home prices climbed 1.7% from a year earlier in September, while slipping 0.3% from the prior month, according to Cotality’s monthly Home Price Insights report. The annual increase was largely supported by stronger performance in Northeastern and Great Lakes states, which helped offset softer conditions in the West and South.

On a month-to-month basis, price growth improved in roughly half of U.S. metropolitan areas and slowed in the rest, pointing to a market without a single clear national pattern, Cotality said. Illinois posted the biggest annual gain, with prices up 6.9%.

The decline to $429,500 was the steepest monthly drop since 2022 and marked the third consecutive September without an increase, Cotality said. The company attributed the weakness to elevated mortgage rates that dampened demand over the summer. In a typical year, home prices rise 0.2% between August and September.

“Potential homebuyers are feeling the pinch from rising costs across the board, especially for daily living expenses,” Cotality Chief Economist Selma Hepp said. “Meanwhile, limited job opportunities and slow wage growth are making households reluctant to move.”

Looking ahead, Cotality projected home-price growth of only 0.9% over the 12 months ending in September.

“Elevated mortgage rates are expected to limit home-buying opportunities in 2027,” Hepp said. “However, more inventory and greater buyer bargaining power will keep home-price growth subdued, improving affordability. Market activity will favor regions with solid economic prospects, regions that attract retiring population and offer affordable homes.”