CLACULATEDRISK
By Bill McBride
FHFA House Prices Unchanged in February; Up 1.7% Year-over-year
S&P/Case-Shiller released the monthly Home Price Indices for February (“February” is a 3-month average of December, January and February closing prices). December closing prices include some contracts signed in October, so there is a significant lag to this data. Here is a graph of the month-over-month (MoM) change in the Case-Shiller National Index Seasonally Adjusted (SA).
The National index increased 0.09% month-over-month (MoM) seasonally adjusted, This is the 7th consecutive month with a MoM increase seasonally adjusted, although the monthly increases have been decreasing.
FHFA House Price Index Unchanged in February; Up 1.7% Year-over-Year
On the FHFA index: FHFA House Price Index® Unchanged in February; Up 1.7 Percent from Last Year
U.S. house prices were unchanged in February, according to the U.S. Federal Housing (FHFA) seasonally adjusted monthly House Price Index (FHFA HPI®). House prices rose 1.7 percent from February 2025 to February 2026. The previously reported 0.1 percent price change in January was revised upward to 0.2 percent.
For the nine census divisions, seasonally adjusted monthly home price changes ranged from -1.1 percent in the Mountain division to +0.6 percent in the South Atlantic division. The 12-month changes ranged from -0.7 percent in the Mountain division to +4.2 percent in the Middle Atlantic division.
emphasis added
Here is a graph from the FHFA report comparing the annual change by region for February 2026 and 2025.
As expected, we are seeing significant regional differences with three regions showing year-over-year price declines.
Case-Shiller House Prices
From S&P S&P Cotality Case-Shiller Index Reports Annual Gain in February 2026
- The S&P Cotality Case-Shiller U.S. National Home Price NSA Index posted a 0.7% annual gain for February 2026, down from a 0.8% rise in the previous month.
- More than half of major U.S. metropolitan markets posted year-over-year price declines in February, with Denver (-2.2%) displacing Tampa as the weakest market and Los Angeles and Washington joining the list of decliners.
- For the ninth consecutive month, inflation outpaced national home price appreciation. CPI ran 1.7 percentage points above the 0.7% annual gain, extending the streak of negative real home price returns. …
“More than half of major U.S. metropolitan markets posted year-over-year price declines in February, signaling that the housing slowdown has broadened well beyond its Sun Belt origins,” said Nicholas Godec, CFA, CAIA, CIPM, Head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices. “The S&P Cotality Case-Shiller National Home Price Index rose just 0.7% year over year in February, down from 0.8% in January. With consumer inflation at 2.4%, U.S. home values have lost ground in real terms for nine consecutive months.
“The geographic mix has shifted meaningfully,” Godec continued. “Mountain West (Denver -2.2%) and Pacific Northwest (Seattle -2.0%) markets now sit alongside Sun Belt decliners Tampa (-2.1%), Phoenix (-1.8%), and Dallas (-1.7%). Los Angeles (-0.8%) and Washington (-0.1%) joined the list of decliners, while Tampa’s decline narrowed for a fourth consecutive month and Denver displaced it as the weakest market in the index.
“Leadership remains concentrated in Midwest and Northeast markets. Chicago led all metros at 5.0% annual growth, followed by New York (4.7%) and Cleveland (4.2%) — the same trio that has anchored this cycle’s leadership. The 7.2 percentage point spread between Chicago and Denver illustrates how localized the housing story has become.
…
The S&P Cotality Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 0.7% annual gain for February. The 10-City Composite saw an annual increase of 1.5%, down from a 1.7% increase in the previous month. The 20-City Composite posted a year-over-year increase of 0.9%, down from a 1.2% rise in the previous month.
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The pre-seasonally adjusted U.S. National, 10-City Composite, and 20-City Composite Indices recorded annual gains of 0.3%, 0.6%, and 0.4%, respectively.After seasonal adjustment, the U.S. National and 10-City Composite Indices reported a monthly increase of 0.1%. In contrast, the 20-City Composite Index had a decrease of 0.05%.
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This graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).
The Composite 10 index was up 0.1% in February SA). The Composite 20 index was down 0.05% (SA) in February. The National index was up 0.1% (SA) in February.
The Composite 10 NSA was up 1.5% year-over-year. The Composite 20 NSA was up 0.9% year-over-year. The National index NSA was up 0.7% year-over-year.
Annual price changes were slightly below expectations.
And a few things to watch …
House Prices and Inventory
This graph below shows existing home months-of-supply, inverted, from the National Association of Realtors® (NAR) vs. the seasonally adjusted month-to-month price change in the Case-Shiller National Index (both since January 1999 through February 2026). Note that the months-of-supply is not seasonally adjusted.
From June 2022 through February 2023, the months are in black showing that prices fell for seven months with low levels of inventory in 2022! The key reasons that prices fell in that period – even with low levels of inventory – was the rapid increase in mortgage rates (and monthly payments), and the mid-2022 surge in inventory. Some potential sellers quickly listed their homes, probably remembering what happened with house prices in the 2006 to 2011 period, but that inventory surge ended pretty quickly.
In February (Orange), the months-of-supply was at 3.8 months, and the Case-Shiller National Index (SA) increased 0.09% month-over-month. Historically prices haven’t declined until inventory reached 6 months of supply. However, the general trend over the last year (blue dashed line) suggests we might see national price declines with inventory less than 5 months of supply.
In the March existing home sales report, the NAR reported months-of-supply increased to 4.1 months NSA. Note that there are significant regional differences in both inventory and house prices.
Mortgage Rates
Here are the weekly 30-year mortgage rates according to the Freddie Mac PMMS since January 2020.
The February Case-Shiller report was mostly for contracts signed in the October through January period when 30-year mortgage rates average around 6.20%.
Rates have increased recently due to the war. I’ve been saying for a few years that the 6% to 7% range for 30-year mortgages is the “new normal”. No one should expect rates to drop into the low 5% range (or lower) without a recession or another crisis.
Comparing to Median House Prices
Here is a comparison of year-over-year change in median house prices from the NAR and the year-over-year change in the Case-Shiller index. Median prices are distorted by the mix and repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices. However, in general, the Case-Shiller index follows the median price.
The median price was up 1.4% year-over-year in March, up from 0.3% YoY in February, andthe Case-Shiller National Index was up 0.7% year-over-year in the February report. This suggests the Case-Shiller index will likely be about the same or slightly higher year-over-year in the March report compared to February.
Annual price changes were slightly below expectations..
Note that the seasonally adjusted month-over-month Case-Shiller price was negative in the March through July 2025 period. This makes it mathematically more difficult to see further declines in the year-over-year change over the next several months.
Inventory and months-of-supply will be the key metrics to watch for house prices.