A rare bit of good news for California house hunters: Mid-year pricing was at its weakest in nearly three years.
Well, that was before the housing market was hit with 7% mortgages once again.
My trusty spreadsheet reviewed a curious home price index from the Federal Housing Finance Agency that tracks the prices of more affordable homes, using purchase and refinancing application data.
This index shows that in the 12 months through June, California home prices gained only 0.9%.
How slow is that? It’s the third-weakest performance among the states, and it badly trails the state’s historical average gain of 6.3% in data going back to 1975.
It’s also the Golden State’s smallest gain since the third quarter of 2023. Curiously, that summer saw the average 30-year mortgage rate top 7% for the first time since 2001.
In the second quarter of 2026, the only housing markets with softer pricing than California were the District of Columbia, down 0.6% – the nation’s lone decline – and Colorado, up just 0.2%.
Elsewhere
Nationally, prices rose just 3% in the past year.
That’s a noteworthy weak gain, as it was the smallest one-year advance in this U.S. index since the first quarter of 2013. Since 1975, U.S. home prices have averaged 5% annual gains.
The largest one-year gains in the second quarter of 2026 were in Hawaii at 8.7%, West Virginia at 8%, and Illinois at 6%.
And California’s economic rivals? Texas home price gains were seventh-weakest at 1.6%, and Florida ranked eighth-weakest at 1.4%.
What’s up?
These cooling gains are signs the market is finally reacting to a huge shortage of buyers who can afford today’s overpriced housing.
Elevated mortgage rates don’t help house hunters. Nor does a wobbly job market and global instability.
Renting, for all its challenges, looks far more affordable.
And, to investors, a hot stock market makes homes look like a poor bet.
How low?
Bargain hunters across America may get a boost of encouragement as this year has seen some of its weakest appreciation in recent memory.
At mid-year 2026, home price gains in 21 states were at lows that hadn’t been seen in at least five years.
Here are the states, ranked by how far back you have to go to find slower one-year gains and how 2026’s second quarter compared with historical gains dating to 1975:
– Georgia: 1.9% gain, weakest since first quarter 2013 vs. 4.5% average increase.
– Massachusetts: 3.2% gain, weakest since first quarter 2014 vs. 6% average increase.
– Nebraska: 3.2% gain, weakest since first quarter 2014 vs. 4.4% average increase.
– South Dakota: 2.2% gain, weakest since first quarter 2014 vs. 4.5% average increase.
– Tennessee: 2.6% gain, weakest since first quarter 2014 vs. 4.7% average increase.
– North Carolina: 2.4% gain, weakest since second quarter 2014 vs. 4.7% average increase.
– Missouri: 3.6% gain, weakest since third quarter 2015 vs. 4.1% average increase.
– Kansas: 3.8% gain, weakest since first quarter 2016 vs. 4.1% average increase.
– New Mexico: 2.1% gain, weakest since first quarter 2016 vs. 4.5% average increase.
– Maine: 3.2% gain, weakest since second quarter 2016 vs. 5% average increase.
– New Hampshire: 3.9% gain, weakest since second quarter 2016 vs. 5.4% average increase.
– Ohio: 4.3% gain, weakest since first quarter 2017 vs. 4.2% average increase.
– Arkansas: 3.2% gain, weakest since second quarter 2017 vs. 4.2% average increase.
– Maryland: 2.2% gain, weakest since first quarter 2019 vs. 4.9% average increase.
– Virginia: 3.8% gain, weakest since first quarter 2019 vs. 4.9% average increase.
– Michigan: 4.6% gain, weakest since second quarter 2020 vs. 4.5% average increase.
– Pennsylvania: 4.7% gain, weakest since second quarter 2020 vs. 4.7% average increase.
– Connecticut: 5.7% gain, weakest since third quarter 2020 vs. 4.9% average increase.
– Iowa: 3.2% gain, weakest since third quarter 2020 vs. 4% average increase.
– New Jersey: 5.4% gain, weakest since third quarter 2020 vs. 5.6% average increase.
– New York: 5.3% gain, weakest since third quarter 2020 vs. 5.5% average increase.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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No. 1: Where is OC’s hottest homebuying neighborhood?
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No. 4: Enderle Center sold, Campo on 17th moves ahead in Tustin
No. 5: Rents rise in just 22% of SoCal. See which cities got hikes
No. 6: Home prices dip in 38% of OC. How did your ZIP do?
No. 7: LA-OC’s worst-paying jobs: Can those wages pay the rent?
No. 8: LA-OC homes still ‘unaffordable’ even with a 0% mortgage
No. 9: Corona del Mar retail center trades hands, a first in 80 years
No. 10: California housing is frozen, but not underwater
