Zillow changes course on home prices: Updated forecast for 400 housing markets

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This week, Zillow economists revealed their up to date 12-month forecast, projecting that U.S. house costs—as measured by the Zillow House Worth Index—will rise 0.4% between July 2025 and July 2026.

Heading into 2025, Zillow’s 12-month forecast for U.S. house costs was +2.6%. Nonetheless, many housing markets throughout the nation softened sooner than anticipated, prompting Zillow to subject a number of downward revisions. By April 2025, Zillow had reduce its 12-month nationwide house worth outlook to -1.7%.

Nonetheless, in current months, Zillow has stopped issuing downward revisions—and this revised 12-month outlook of +0.4% truly represents an upward adjustment.

“House worth appreciation is sort of flat on the nationwide common, rising simply +0.2% over the previous 12 months. Decrease charges and low worth development have barely improved affordability; month-to-month mortgage prices are down $19 over the previous 12 months, however the typical fee remains to be almost $1,000 per 30 days greater than earlier than the pandemic,” wrote Zillow economists this week.

Zillow added that: “Affordability and entry is step by step enhancing the place builders have been in a position to sustain with demand, displaying why constructing extra properties is so important. Metros the place worth corrections are steepest are amongst these with the biggest enhance in stock in comparison with earlier than the pandemic. All of those metros besides Miami rank among the many high 10 for house constructing permits from 2020 to 2024. When demand for properties surged, builders had been in a position to reply quickest in areas with fewer land-use restrictions. That gave patrons extra choices and sellers extra properties to maneuver into, liberating up current provide.”

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Among the many 300 largest U.S. metro space housing markets, Zillow expects the largest house worth enhance between July 2025 and July 2026 to happen in these 15 areas:

1. Atlantic Metropolis, NJ → 4.3%
2. Torrington, CT → 4.1%
3. Saginaw, MI → 3.8%
4. Kingston, NY → 3.8%
5. Pottsville, PA → 3.8%
6. Rockford, IL → 3.6%
7. Harmony, NH → 3.6%
8. Knoxville, TN → 3.4%
9. New Haven, CT → 3.4%
10. Norwich, CT → 3.4%
11. Hartford, CT → 3.2%
12. Fayetteville, AR → 3.1%
13. Hilton Head Island, SC → 3.0%
14. Vineland, NJ → 3.0%
15. Barnstable City, MA → 2.9%

Among the many 300 largest U.S. metro space housing markets, Zillow expects the largest house worth decline between July 2025 and July 2026 to happen in these 15 areas:

1. Houma, LA → -8.6%
2. Lake Charles, LA →  -8.2%
3. Alexandria, LA →  -6.6%
4. Lafayette, LA →  -6.2%
5. New Orleans, LA →  -5.8%
6. Shreveport, LA →  -5.7%
7. Beaumont, TX → -5.3%
8. San Francisco, CA →  -4.1%
9. Corpus Christi, TX →  -3.8%
10. Santa Rosa, CA →  -3.7%
11. Monroe, LA →  -3.7%
12. Odessa, TX →  -3.7%
13. Austin, TX →  -3.5%
14. Chico, CA →  -3.4%
15. Texarkana, TX →  -3.3%

Beneath is what the present year-over-year charge of house worth development appears like for single-family and rental house costs. The Solar Belt, specifically Southwest Florida, is at present the epicenter of housing market weak spot proper now.

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