Zillow revises down its home price forecast—this map shows its outlook for 400 housing markets.
The company’s Home Value Index now predicts U.S. home prices will remain stagnant. While Zillow’s national home price forecast isn’t negative, it isn’t exactly bullish either. It predicts a slow national housing market in 2026, where affordability might slightly improve as U.S. income growth outpaces increases. While Zillow’s national home price forecast isn’t negative, it isn’t exactly bullish either. It predicts a slow national housing market in 2026, where affordability might slightly improve as U.S. income growth outpaces home price increases.
- Zillow’s Home Value Index now expects flat (or near-flat) U.S. home prices in 2026
- Not a crash—but no meaningful appreciation either
- This reflects a “soft landing” housing market
A few forces are balancing each other out:
- High mortgage rates are still limiting what buyers can afford
- Inventory is slowly improving, giving buyers more options
- Income growth is continuing, which helps affordability a bit
- Result: instead of prices falling sharply, growth just stalls
Zillow tracks metro-level forecasts, and the variation is key:
- Some markets (especially formerly overheated ones) may see modest declines
- More affordable regions could still see small gains
- Expensive coastal areas are more likely to underperform or stagnate
Even without falling prices:
- If wages rise faster than home prices, buying becomes slightly easier
- If mortgage rates ease even a little, that further helps buyers
- Not a 2008-style crash
- Not a strong buyer’s market everywhere
- Not a return to rapid price growth
Zillow is signaling a “reset year” for housing:
- Sellers lose pricing power
- Buyers gain a bit more leverage
- The market cools without collapsing