US Case-Shiller/FHFA House Prices (Apr. 2026)

Pause in house price falls will be temporary

The unchanged level of house prices in April was a slightly better result than we had been predicting and reinforced our view that a sustained downturn in prices this year remains unlikely, despite a string of recent falls. That said, with the impact of the recent jump in mortgage rates driven by the Iran war yet to fully feed through, further declines in house prices still seem likely in the coming months.  

The unchanged seasonally adjusted S&P Cotality Case-Shiller 20-City Home Price Index in April was a slight improvement from the two consecutive declines in February and March. Favourable base effects meant the annual rate of house price growth rose to 1.1%, from a slightly upwardly revised 0.9% in March. But the three-month annualised rate – which is a better gauge of recent house price trends – fell to a nine-month low of -1%, from -0.1%. Meanwhile, the FHFA house price index fell by 0.1% m/m, but that still brought the annual rate up to 2%. The regional breakdown showed that house price falls remained most pronounced in the Sun Belt and Western Metros, with Seattle (-2.3%), Tampa (-1.8%) and Pheonix (-1.7%) among those cities seeing the largest annual declines. In contrast, several Midwest and Northeast markets continued to experience strong annual price growth, most notably Chicago (+6.5%) and New York (+3.8%).

Overall, we doubt the pause in house price falls in April marks a clear turning point. After all, the Case Shiller index is based on home closings which typically lag agreements by 1-2 months, meaning that the impact of the further rise in the 30-year fixed mortgage rate to 6.6% in May has yet to fully feed through. Accordingly, further declines in house prices in the coming months look likely. Nonetheless, with leading indicators such as the sales-to-new-listings ratio and the average mortgage application size still pointing to positive (albeit weak) house price growth this year, we are comfortable with our forecast for house prices to rise by 1% y/y in 2026.