Zillow has revised its forecast for US home prices, projecting a decline of 1.7% between March 2025 and March 2026. This marks a significant downgrade from the company’s previous outlook, which had predicted a 0.8% increase in 12-month growth.
According to Zillow economists, rising active listings are contributing to softer price growth, as greater supply provides more options and bargaining power for buyers. Affordability challenges caused by years of rapid home price increases and high mortgage rates are also weighing on national home price growth.
The company expects the strongest price appreciation in areas such as Atlantic City, NY, and Knoxville, TN, with growth rates ranging from 1.4% to 2.4%. In contrast, areas like Houma, LA, and Lafayette, LA, are expected to see declines of up to -10.1%.
Notably, Zillow’s bearish forecast diverges from other major forecasters, including Fannie Mae and Wells Fargo, which still predict modest growth in US home prices this year.
The shift in outlook is attributed to weakening housing markets around the Gulf, which is expected to have a negative impact on nationally aggregated home prices. However, some analysts argue that Zillow’s bearish forecast may be overly pessimistic, particularly for regions like the Northeast and Midwest where active inventory remains low.
Source: https://www.resiclubanalytics.com/p/zillow-turns-housing-bear-just-look-at-its-updated-2025-forecast