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Case-Shiller: Midwest Strong, West Faces Decline

  //house-home.news-articles.net/content/2026/01/2 .. e-shiller-midwest-strong-west-faces-decline.html
  Published in House and Home on Tuesday, January 27th 2026 at 14:40 GMT by HousingWire
      Locales: Michigan, Illinois, Ohio, Pennsylvania, Indiana, Wisconsin, UNITED STATES

Tuesday, January 27th, 2026 - The latest S&P CoreLogic Case-Shiller Home Price Index paints a complex picture of the U.S. housing market. While overall home prices remain elevated compared to pre-pandemic levels, the national growth rate is visibly slowing, revealing a significant divergence between regional performance. The Midwest is currently defying broader trends, experiencing robust gains, while the West faces a concerning decline.

The national 20-city composite index reflects this nuanced reality, showing a 4.7% year-over-year increase, a deceleration from the 5.6% recorded in September. While still demonstrating growth, this trend confirms analysts' expectations of a cooling market. As Amy Brandt, deputy chief economist at First American Financial Corp, points out, "While October's data shows that home price growth is decelerating, it is still a robust pace." This suggests the market isn't crashing, but rather recalibrating after the rapid appreciation seen in previous years.

The Midwest: A Beacon of Strength

The most striking observation is the strength of the Midwest housing market. With a remarkable 5.7% year-over-year increase, the region significantly outperforms the national average. This resilience seems attributable to a combination of factors. Population shifts, driven by factors such as more affordable living and a perceived lower cost of living compared to coastal hubs, are drawing new residents to Midwestern cities. Moreover, robust local economies and increased job opportunities within the region are bolstering demand. Cities like Minneapolis (up 8.2%), Detroit (+7.4%), and Chicago (+6.9%) are leading the charge, showcasing exceptional price growth. This performance contrasts sharply with the narrative of a slowing national market, highlighting the localized nature of housing trends.

West Coast Woes: A Tale of Correction

Conversely, the West is grappling with a noticeable correction. The region experienced a 1.7% decline in home prices year-over-year, the only region in the nation to register a decrease. This downturn is largely linked to the overvaluation of markets during the pandemic boom. Cities like San Francisco (-11.7%), Seattle (-8.7%), San Jose (-8.6%), Portland (-5.7%) and Phoenix (-4.8%) are facing particularly steep declines.

While the recent dip in mortgage rates has offered some stabilization to the Western market, as noted by Lisa Fischer, research and analytics manager at CoreLogic, "The West continues to be a source of concern," prices remain substantially below their peak. The decline reflects a correction following speculative investment and a shift in buyer preferences as remote work trends mature and people reconsider urban living.

National Trends and Underlying Drivers

The continued upward pressure on prices - despite the slowing growth rate - is primarily attributed to the persistent imbalance between housing supply and demand. While new construction has ramped up in recent months, it has not been sufficient to alleviate the chronic shortage of available homes. Limited inventory continues to fuel bidding wars and support price appreciation, even as affordability concerns mount. The Federal Reserve's monetary policy decisions also play a significant role, influencing mortgage rates and overall economic conditions, which in turn impacts housing affordability and demand.

Looking Ahead

The divergence in regional performance highlights the increasing complexity of the U.S. housing market. While the Midwest's strength provides a degree of optimism, the West's struggles underscore the fragility of certain markets. Experts anticipate that the slowing growth trend will persist throughout 2026, with regional variations becoming even more pronounced. Future reports will be closely watched to observe how the interplay of population shifts, economic conditions, mortgage rates, and construction activity shape the trajectory of home prices across the nation. The Case-Shiller Index, with its unique repeat sales methodology, continues to be a crucial indicator for understanding the nuanced dynamics of the housing landscape.

The Case-Shiller index measures home price changes using a repeat sales methodology. The 20-city composite index is a weighted average of home prices in 20 major U.S. metropolitan areas.