National home-price growth rose 1.7% year over year in September but dipped 0.3% compared to August, with the annual increase being driven by strong results in the Northeastern and Great Lakes states that offset weakness in the West and South, Cotality said in its monthly Home Price Insights report.  

Compared with August, appreciation strengthened in about half of U.S. metros and weakened in the other half, suggesting no single national trajectory, Cotality said. Illinois led the nation in price growth with a 6.9% increase. 

The month-over-month dip to $429,500 was the largest decline since 2022 and the third September in a row without monthly growth, Cotality noted, blaming the softness on high mortgage rates that cooled summer demand. Normally, home prices rise 0.2% from August to September. 

“Potential homebuyers are feeling the pinch from rising costs across the board, especially for daily living expenses,” Cotality Chief Economist Selma Hepp said. “Meanwhile, limited job opportunities and slow wage growth are making households reluctant to move.” 

Looking ahead, Cotality expects home-price growth of just 0.9% for the 12 months through September. 

“Elevated mortgage rates are expected to limit home-buying opportunities in 2027,” Hepp said. “However, more inventory and greater buyer bargaining power will keep home-price growth subdued, improving affordability. Market activity will favor regions with solid economic prospects, regions that attract retiring population and offer affordable homes.”