Zillow updates home price forecast for over 400 housing markets: See the map

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This week, Zillow economists printed their up to date 12-month forecast, projecting that U.S. dwelling costs—as measured by the Zillow Residence Worth Index—will fall by 1.0% between June 2025 and June 2026. For calendar yr 2025, they forecast U.S. dwelling costs, as measured by the Zillow Residence Worth Index, will fall -2.0%.

Heading into 2025, Zillow’s 12-month forecast for U.S. dwelling costs was +2.6%. Nevertheless, many housing markets throughout the nation softened quicker than anticipated, prompting Zillow to concern a number of downward revisions. Whereas Zillow has since stopped slicing its outlook, it’s nonetheless sort of bearish. At the very least over the short-term.

Why did Zillow downgrade its forecast for nationwide dwelling costs so many occasions this yr?

“The rise in [active] listings is fueling softer [home] worth progress, as higher provide supplies extra choices and extra bargaining energy for consumers,” Zillow economists wrote in March. “Potential consumers are opting to stay renters for longer as affordability challenges suppress demand for dwelling purchases.”

Basically, Zillow believes that strained housing affordability—pushed by U.S. dwelling costs hovering over 40% in the course of the Pandemic Housing Growth and mortgage charges leaping from 3% to six% in 2022—is placing upward stress on energetic stock progress and short-term downward stress on dwelling worth progress.

“Sellers have been motivated to hitch the market by means of the primary half of the yr, however purchaser demand hasn’t saved up. With housing stock accumulating, Zillow forecasts dwelling values will decline by 2.0% in [calendar year] 2025,” wrote Zillow economists on Wednesday. “Barely decrease mortgage charges towards the tip of the yr may additional help affordability, however important enhancements seem unlikely. Nonetheless, dwelling consumers have some benefits–loads of choices have given them extra bargaining energy than in any summer season in at the least seven years.”

In keeping with Zillow’s dwelling worth mannequin, the itemizing web site additionally believes that weakening and softening housing markets throughout the Solar Belt will weigh on nationally aggregated dwelling costs this yr.

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Among the many 300 largest U.S. metro space housing markets, Zillow expects the strongest dwelling worth appreciation between June 2025 and June 2026 to happen in these 10 areas:

1. Atlantic Metropolis, NJ → 2.9%
2. Kingston, NY → 2.2%
3. Knoxville, TN → 2.0%
4. Torrington, CT → 1.9%
5. Rockford, IL → 1.7%
6. Harmony, NH → 1.7%
7. Pottsville, PA → 1.7%
8. Fayetteville, AR → 1.6%
9. Norwich, CT → 1.6%
10. East Stroudsburg, PA → 1.5%

Among the many 300 largest U.S. metro space housing markets, Zillow expects the weakest dwelling worth appreciation between April 2025 and April 2026 to happen in these 10 areas:

1. Houma, LA → -9.6
2. Lake Charles, LA → -9.5%
3. Alexandria, LA → -8.0%
4. New Orleans, LA → -7.2%
5. Lafayette, LA → -7.0%
6. Shreveport, LA → -6.9%
7. Beaumont, TX → -6.5%
8. San Francisco, CA → -6.1%
9. Austin, TX → -5.1%
10. Corpus Christi, TX → -5.0

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

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