Mortgage Rates Soar, Sales Slump, But Home Prices Still Rise

Today, Veros Real Estate Solutions (Veros^®), an industry leader in enterprise risk management and collateral valuation services, released its Q3 2026 VeroFORECAST℠, projecting that U.S. home prices will rise just 1% over the next 12 months. VeroFORECAST evaluates home prices in over three hundred of the nation’s largest housing markets, and Veros is committed to the data science of predicting home value based on rigorous analysis of the fundamentals and interrelationships of numerous economic, housing, and geographic variables pertaining to home value.

The remarkable thing about America’s housing market is not that prices are barely rising. It is that they are rising at all.

Mortgage rates have crossed 7% again. Home sales remain historically weak. Buyers are resisting today’s combination of prices and financing costs; sellers are resisting price reductions that would bring substantially more buyers back. The disagreement is being settled another way: fewer homes change hands.

Affordability has also become much bigger than the mortgage payment. Property taxes, insurance premiums, HOA fees and maintenance costs all add to the price of owning a home. Meanwhile, more existing homes are available for sale than a year ago, giving buyers greater choice and bargaining power. Weak sales, more inventory and strained affordability would ordinarily make falling prices seem likely. Yet national forecasts continue to call for modest appreciation.

There is an important limitation in what housing data can tell us about this market. Home price indices measure properties that sell. The homeowner who rejects an offer and withdraws a listing leaves no transaction behind. And a seller concession can lower what a buyer effectively pays without producing an equivalent reduction in the recorded sale price. Some of the housing market dynamics are therefore playing out through transactions that never happen.

Then there is the problem with talking about “the U.S. housing market” as though it were a single market.

Supply, affordability, employment, migration and demographics differ sharply across the country. The divide runs even deeper than geography. Within the same metro, different price segments can move in different directions. In many markets, higher-priced and luxury homes have been more resilient than entry-level properties. Affluent buyers tend to be less sensitive to mortgage rates, are more likely to make large down payments or pay cash and can draw on accumulated housing and financial wealth.

The latest VeroFORECAST℠ makes those divisions particularly visible.

The markets with the most price upside are concentrated largely in the Northeast and Midwest, led by Rockford, IL, with projected appreciation of 4.7%. Norwich, Hartford, Racine, Erie, Binghamton, Lancaster, Milwaukee, South Bend and Reading round out the ten markets at the top of the forecast, with expected gains ranging from 3.5% to 4.7%.

Top 10 Strongest-Performing Markets

The other end of the forecast looks very different. Six of the ten markets projected to lose value are in Texas, including Corpus Christi, Tyler, Sherman, Austin, Houston and San Antonio. Outside Texas, Stockton, CA, and Boulder and Colorado Springs, CO, and Tucson, AZ, complete the group. Even here, however, the projected declines are relatively small, ranging from 0.5% to 1.1%.

Bottom 10 Worst-Performing Markets

The Q3 2026 VeroFORECAST℠ therefore describes a housing market with little movement nationally but considerable variation underneath the headline number. With affordability still limiting how much buyers can pay, the next year is likely to be defined less by the national average than by the widening differences among individual markets.

VeroFORECAST Methodology

The quarterly VeroFORECAST reports to clients by subscription and to industry media in a summary overview. The current report is based on 324 Metropolitan Statistical Areas (MSAs) data, including 17,882 ZIP codes, 975 counties, and 82% of U.S. population covered. The report is a projected increase twelve months forward.

• Download the Q3 2026 – Q3 2027 VeroFORECAST infographic

Source: Veros Real Estate Solutions (Veros®)

This information is intended for use by the media for economic reporting and should only be used for physical or digital publication or broadcast, in whole or in part, and must be sourced from Veros Real Estate Solutions. The company name must be visible on the screen or website if the data are illustrated with maps, charts, graphs, or other visual elements. For questions, analysis, interpretation of the data, or permission to reproduce, contact communications@veros.com.

About Reena Agrawal, Senior Research Economist

Reena Agrawal has a Ph.D. in Economics from Vanderbilt University. She has fifteen years of experience in macroeconomic forecasting, sectoral research, feasibility studies of complex projects, and preparing reports for multi-national clients.

About Veros Real Estate Solutions (Veros®)

A mortgage technology innovator since 2001, Veros is a proven leader in enterprise risk management and collateral valuation services. The firm combines predictive technology, data analytics, and industry expertise to deliver advanced automated solutions that control risk and increase profits throughout the mortgage industry, from loan origination to servicing and securitization. Veros’ services include automated valuation, fraud and risk detection, portfolio analysis, forecasting, and next-generation collateral risk management platforms. Veros is the primary architect and technology provider of the GSEs’ Uniform Collateral Data Portal® (UCDP®). Veros also works closely with the FHA to support its Electronic Appraisal Delivery (EAD) portal. The company is also making the home-buying process more efficient for our nation’s Veterans through its appraisal management work with the Department of Veterans Affairs. For more information, visit www.veros.com or call 866-458-3767.

View source version on businesswire.com: https://www.businesswire.com/news/home/20261006656889/en/

Media gallery