A slow national number

US house prices rose 2.1% between the second quarter of 2025 and the second quarter of 2026, and 0.3% from the first quarter of 2026, the Federal Housing Finance Agency reported on August 25. The seasonally adjusted monthly index for June was unchanged from May.

The FHFA index is built from purchase transactions on mortgages acquired or guaranteed by Fannie Mae and Freddie Mac. It uses a repeat-sales methodology, comparing prices of the same properties over time, which controls for changes in the mix of homes sold. It also excludes cash purchases, jumbo loans above conforming limits, and government-backed lending.

A 2.1% annual gain sits below the pace of general consumer inflation reported for the same period, which means the national index recorded a real decline in home values even while the nominal number was positive.

Where the dispersion is

Prices rose in 46 states and the District of Columbia. Alaska posted the largest annual increase at 8.3%; New Mexico recorded the largest decline at -1.2%. Among the 100 largest metropolitan areas, 76 saw gains, led by Elgin, Illinois at 7.7%, while Everett, Washington fell 3.7%.

By census division, East North Central was strongest at 4.5% year over year. The Pacific division was weakest, at just above 0.0%.

Analysis: a national 2.1% concealing a range from 8.3% to -1.2% is the central fact of this release. The Midwest outperformance and Pacific stagnation broadly track relative affordability — divisions that never reached the most extreme price levels have retained more room to appreciate.

Consistency with other indexes

FHFA's earlier monthly release, published July 28, put the May index up 0.3% on the month and 2.2% year over year, with April's previously reported 0.1% decline unchanged.

A separate repeat-sales measure pointed the same direction. The S&P Cotality Case-Shiller National Index, released the same day, reported a 1.1% annual gain for May 2026, with the 20-City Composite up 1.6% and Chicago the strongest metro at 6.9%.

The two indexes differ in coverage — Case-Shiller includes cash and jumbo transactions that FHFA excludes, which is one reason the national figures do not match exactly. That both show low-single-digit nominal growth with a Midwest-leading, West-lagging pattern is the more meaningful agreement. No FHFA monthly release covering July or August 2026 data had been published as of this article.

What a repeat-sales index cannot tell you

The FHFA methodology is a strength and a limitation at once. By comparing prices of the same properties across time, it removes the distortion that occurs when the mix of homes sold shifts toward larger or smaller properties.

But it also excludes a large part of the market by construction. Cash purchases leave no mortgage record and do not appear. Loans above the conforming limit are absent, which systematically under-covers high-cost coastal markets. Government-backed FHA and VA lending is also outside the index, under-covering first-time and lower-down-payment buyers.

Those exclusions cut in opposite directions geographically, which is one reason the Pacific division reading should be treated with extra caution: it is the region where jumbo lending is most common and therefore where FHFA coverage is thinnest.

Homeowners should also note what the index measures: the value of the housing stock, not the equity position of any individual. A 2.1% national gain says nothing about a specific property, its condition, or its neighborhood.