Zillow economists have downgraded their forecast for national home prices, citing a softer housing market in the Sun Belt and slower-than-expected price growth this year. The latest data shows U.S. home prices increasing by just 0.4% year-over-year, with economists now expecting a decline of 0.7% between May 2025 and May 2026.
The softening housing market is attributed to increased inventory, which has given buyers more options and power in negotiations. As a result, competition among buyers has declined to its lowest level seen in May records since 2018. Zillow’s market heat index shows a balanced market nationwide, indicating that buyers are gaining the upper hand.
Zillow economists predict only 4.1 million U.S. existing home sales in 2025, marking the third-straight year of suppressed sales. Home values have fallen in 22 of the 50 largest metro areas over the past year, and sellers cut prices on almost 26% of listings nationwide.
Despite Zillow’s predictions, some experts remain skeptical about Florida’s housing market. With a significant increase in active inventory and months of supply, it could signal potential pricing weakness. In fact, single-family home and condo prices are currently declining in most Florida markets.
However, the top-performing cities for home price appreciation between May 2025 and May 2026 are expected to be in the Northeast and South, including Atlantic City, Kingston, and Knoxville. The weakest markets will be in the Gulf Coast region, with cities like Houma, Louisiana, and Beaumont, Texas, facing significant declines.
Source: https://www.fastcompany.com/91355943/housing-market-map-zillow-updated-home-price-forecast-for-400-cities-markets