August 2026 Housing Market Report: Where Home Prices Fell, Where Sellers Cut, and Who Could Afford to Buy

The typical U.S. home rose 1.2% over the year to $368,697 in August, according to the Zillow Home Value Index, and is up 20.3% over five years. A 20%-down mortgage on that home cost $1,897 a month in principal and interest and took about $100,006 of household income. Typical rent was $1,948, up 2.5% in a year. 26.4% of listings cut their price during the month, homes went pending in 53 days, and 1.41M homes were for sale, up 1.9% from a year earlier.

Underneath that average, the 50 states moved in different directions. Values were falling in 9 states and rising in 39; 27 states were at an all-time high while Arizona sat 9.6% below its July 2022 peak of $462,506. This report reads the state-level Zillow files for August 2026 as published, with no modeling and no forecasts.

The steepest year-over-year declines were in Nevada (-1.8%), Texas (-1.6%), Florida (-1.5%), Colorado (-1.4%), and Arizona (-1.1%). Nevada's typical home stood at $442,027, 4.3% below its July 2022 peak of $461,667. At the other end, Alaska (+5.7%), New York (+5.6%), and Illinois (+5.3%) posted the fastest gains.

By region, the West carried the highest median state value at $479K and the South the lowest at $270K. The West was up 1.1% on the median state, with values falling in 5 of its 13 states, the Northeast was up 2.4% on the median state, with values falling in 0 of its 11 states, the Midwest was up 3.5% on the median state, with values falling in 0 of its 12 states, and the South was up 1.5% on the median state, with values falling in 4 of its 14 states.

Price cuts are the earliest sign that a market is turning. Colorado (32.3%), Utah (31.5%), Tennessee (31.4%), Washington (31.0%), and Indiana (30.6%) had the largest share of listings with a reduced price, all above the national 26.4%. The fewest cuts were in New York (17.3%), Hawaii (19.1%), and Wisconsin (19.5%).

Combining price cuts with days to pending and the change in homes for sale, 7 states were cold, buyer's markets (Utah, Arizona, North Carolina, Tennessee, Georgia, South Carolina, and Oklahoma) and 2 were hot, seller's markets (California and North Dakota). Florida had the slowest sales at 89 days to pending; Connecticut the fastest at 24.

Zillow's income-needed figure assumes 20% down at that month's rates and a payment of no more than 30% of income. Set against each state's median household income from the Census Bureau, the typical household could afford the typical home in 2 of 50 states: West Virginia and Iowa. The widest gaps were in California (needed $197K, median earns $92K), Hawaii (needed $202K, median earns $95K), and Massachusetts (needed $177K, median earns $101K).

Renting was cheaper than a mortgage payment in 37 of the 50 largest metros, one per state. The widest gap in favor of renting was Los Angeles (California) at $1,960 a month; buying won most clearly in Charleston (West Virginia), where the payment was $452 below rent. Both comparisons leave out property tax, insurance and maintenance.

Every housing figure is Zillow Research's published number for August 2026: the Zillow Home Value Index (typical value of homes in the middle third of a market, not a median sale price), the Zillow Observed Rent Index for each state's largest metro, Zillow's mortgage payment and income-needed series, and its inventory, price-cut and days-to-pending metrics. Sale and list prices are the latest available at the time, which can lag a month. Median household income is from the Census Bureau's American Community Survey and does not change month to month. The current 50-state table, map and a page for every state are on the housing hub.