A $400,000 home in South Dakota is worth roughly $12,000 less than it was a year ago. In Washington, D.C., the math is similar. Across Florida, the decline may be even steeper, though the exact figure remains unpublished. These are not foreclosure-crisis numbers, but they mark a turning point: Cotality’s home price index for February 2026, released in April, shows that 13 states recorded year-over-year price declines, the widest geographic retreat since the early years of the post-crash recovery.
Nationally, Cotality pegged annual appreciation at just 0.5%, a figure so close to zero it barely registers against the double-digit gains that defined the pandemic-era market. And Cotality is not the only firm flagging the shift. First American Data & Analytics reported that its own index turned negative 0.2% year over year in February, the first time that measure has dipped below zero since 2012. Homes.com and CoStar Group, using listing-derived medians, placed the national number at a nearly flat 0.2% and noted that large metro areas were split almost evenly between gains and losses.
Three independent indices, built on different transaction samples, all cluster around the zero line. The precise number varies by source. The direction does not.
Federal data confirms regional weakness
The Federal Housing Finance Agency tracks prices using conforming mortgage transactions and offers one of the most methodologically transparent benchmarks available. Its March 2026 release placed the national year-over-year gain at 1.6% through January, still positive but a fraction of the pace seen in 2021 and 2022. More telling, the same report noted that some census divisions had already turned negative on a 12-month basis, meaning regional softness was showing up in federal records before the private-sector February readings even arrived.
FHFA also publishes downloadable state-level price index files that allow anyone to track quarterly and annual changes, with geographic boundaries defined by the Office of Management and Budget through the Census Bureau’s metropolitan statistical area bulletins. FHFA’s state-level numbers for February 2026 have not yet been released, so the specific count of 13 declining states comes from Cotality’s vendor index. Once FHFA publishes its own February figures, the count could shift slightly in either direction.
Why the numbers do not perfectly agree
Cotality says +0.5%. Homes.com says +0.2%. First American says -0.2%. All three describe the same month. The gap is not a sign that someone got it wrong. Each index draws on a different slice of the market: FHFA uses only conforming-loan purchase transactions, Cotality applies a repeat-sales model to its own property records, First American weights metro-level data differently, and Homes.com tracks listing-based medians.
Think of the spread between +0.5% and -0.2% less as a contradiction and more as a range that brackets where the true national number likely sits: somewhere very close to zero. When multiple independent measures all converge on flat-to-negative growth, the underlying trend is hard to dispute, even if the exact decimal point is debatable.
Where the declines are concentrated
The states losing value are not randomly scattered. Cotality’s data points to a concentration in Sun Belt markets and a handful of smaller northern states.
Florida stands out. Its presence on the list tracks with a pattern that built throughout 2025: rising inventory, climbing property insurance premiums, a surge of new construction adding supply, and a pullback in the pandemic-era migration wave that had supercharged demand. Cotality named Florida among the steepest state-level declines but did not publish a specific percentage.
Washington, D.C., technically a district rather than a state and separate from the 13-state count, saw prices fall about 3%. That reflects a federal employment market that has cooled alongside broader government spending uncertainty.
South Dakota and Montana, both on Cotality’s list of steeper declines, are smaller markets that attracted remote-worker demand during the pandemic. As that demand has normalized, prices appear to be giving back some of their outsized gains.
New construction is part of the picture in several Sun Belt states. Elevated housing starts during 2024 and early 2025 pushed additional inventory onto the market just as buyer demand softened, creating a supply-and-demand mismatch that is now pulling prices lower. The full roster of all 13 states has not been independently confirmed by a second index at the state level, and some of those names may shift once FHFA or another source publishes corroborating breakdowns in the coming weeks.
What the data does and does not tell us
The evidence assembled here consists entirely of data releases and corporate index reports. No economists, real estate agents, or housing researchers have gone on the record about the implications of multi-state declines, and no FHFA officials have publicly weighed in. The causal factors most consistent with the data include new construction adding supply in Sun Belt markets, elevated mortgage rates suppressing demand, and shifting migration patterns. Without named analysts on the record, those explanations reflect the data rather than expert endorsement.
What the data does establish clearly is the scope: at least 13 states are now on the wrong side of zero, and the national average is close enough to flat that even modest further cooling could tip additional markets into negative territory.
What this means for buyers and sellers
For sellers in the affected states, the practical implication is immediate. Pricing a home based on comparable sales from peak months in 2024 or early 2025 risks longer days on market and eventual price cuts. That 3% annual decline on a $400,000 home, roughly $12,000 in lost equity over 12 months, is enough to reshape negotiations and erode the cushion many owners built during the boom years.
Buyers in those same markets hold more leverage than at any point since the pandemic began. Inventory is higher, competition is thinner, and sellers are more willing to negotiate on price and concessions. In states still posting gains, the dynamic is different, and that split is the defining feature of the spring 2026 market: where you buy now matters more than any single national trend line.
Mortgage rates remain a wild card. The average 30-year fixed rate has hovered near 7% through early 2026, according to Freddie Mac’s Primary Mortgage Market Survey, and that affordability pressure continues to suppress buyer demand in many metros. If rates ease later this year, some of the year-over-year declines could prove shallow as sidelined buyers re-enter the market. If rates hold or climb, the list of declining states could lengthen by summer.
What to watch next
The spring buying season is the market’s annual stress test, and 2026’s version carries more uncertainty than any since the post-pandemic cooldown began. FHFA’s state-level data for February, expected in the coming weeks, will either confirm or adjust Cotality’s 13-state count. The S&P CoreLogic Case-Shiller index, which lags by about two months, will offer yet another cross-check when it catches up to February transactions.
Anyone planning to buy or sell in the months ahead should start with the most recent local data rather than leaning on national averages. FHFA’s free, downloadable state-level indices are a solid starting point. Cotality, First American, and Homes.com each publish metro-level breakdowns as well. A national number that rounds to zero tells an increasingly incomplete story when 13 states are moving in the opposite direction from the headline.
The era of assuming home prices only go up has, for residents of at least 13 states, already ended. Whether the rest of the country follows depends on what happens with rates, inventory, and buyer confidence over the next several months.
