New Housing Growth Offers Opportunities

05/14/2026 Sofia Feeney

As we navigate the spring 2026 buying season, the U.S. housing market is presenting a complicated landscape. The overall trend indicates a cooling market, with slower price growth nationwide and significant differences in performance across various regions.

Cotality’s latest Home Price Index (HPI) shows annual home price growth at only 0.5%, marking the slowest increase in more than ten years. This moderation in price growth has contributed to an improvement in affordability, with the typical real principal and interest payment decreasing by 14%, prior to the Middle East conflict, from the peak in May 2024.

Despite the subdued annual growth, the HPI report notes a slight monthly increase of 0.04% in home prices from January, with projections for continued incremental rises throughout the year. These seasonal increases may signal stabilization in the broader market decline. However, recent geopolitical developments have driven mortgage rates higher, introducing an element of uncertainty for future housing market activity.

The national averages obscure a more intricate and fractured regional narrative. The most notable split has been between the resilient Northeast and the cooling Sun Belt, but recent data suggests a new divergence: Continued strength in the Northeast, renewed activity in the Sun Belt and cooling in Mountain and Northern West regions. Factors contributing to these regional variations include affordability constraints, migration patterns, job market shifts and most significantly, the supply of homes for sale. In certain areas, inventories have bounced back and surpassed pre-pandemic levels, while in others, they remain at historic lows. For example, Colorado Springs, Colo., Denver, San Antonio, Seattle and McAllen, Texas, have seen existing for-sale inventories at levels more than 60% above pre-pandemic figures.

In addition to increased resale inventory, many markets are witnessing a surge in newly constructed homes.

Cotality’s Growth Intelligence indicators highlight where growth, new construction and development are most pronounced. Four Texas metro areas, Dallas, Houston, San Antonio and Austin, collectively accounted for 15% of all recently newly completed housing units. Recently completed growth instances are defined as a “year built” value in the last two years or a sale date during the last two years.

Texas as a whole made up 18% of the total. Florida contributed 13% and North Carolina 6.3%, meaning Texas and Florida together represent over 30% of new builds despite comprising only around 16% of the U.S. population.

Larger metro areas naturally account for a greater share of growth, but even when focusing on markets with the fastest new residential growth, regardless of size, many are still found in Florida and Texas.

As inventory has increased in many markets, especially with more homes available for sale, price growth has slowed and in some cases, declined. Florida, Colorado and Texas are among the top five states, excluding Washington, D.C., where home prices have fallen over the past year.

With affordability improving due to more homes entering the market, it is crucial to identify areas where early signs of development could further ease affordability pressures. Early growth instances are defined as the appearance of a new CLIP, ownership changes to a builder or developer, or shifts in land use code from a 4XX, 5XX or 6XX code to a residential code, all occurring in the past two years and not followed by events marking ongoing or completed growth.

Notably, there is a shift away from Florida and, to a lesser extent, from Texas and North Carolina. Early growth in these three states now stands at 23.3%, with Florida experiencing the largest drop: About nine percentage points. While Texas still holds a substantial share, the Midwest is seeing the most significant increases in early growth indicators relative to overall new development which is critically important as many local markets in states such as Ohio, Michigan, Wisconsin and Kentucky, still lag pre-pandemic inventory levels by more than 30%.

Consequently, home price growth in these states remains robust: Wisconsin saw a 4.7% year-over-year increase and Ohio recorded a 3% rise, which is much stronger than the national 0.5% increase or the declines seen in Florida and Texas.

While Midwest markets show promise for future affordability improvements, regions under the most price pressure are in the Northeast, particularly New Jersey and Connecticut. However, early growth indicators do not suggest any imminent relief from new development in these areas.

By Dr. Selma Hepp. She is the Chief Economist of Cotality. She may be reached at newsmedia@cotality.com.