Zillow now expects near-flat national home prices for 2026–2027, with big regional swings across 400+ markets—mixing mild gains in some metros with sharper declines in others.
Zillow has pushed its 12-month home price forecast lower, signaling a housing market that’s cooling without turning fully negative.
Zillow’s economists now project U.S.. home prices—tracked via the Zillow Home Value Index—to rise roughly flat (+0.0%) from March 2026 to March 2027.. The update comes after a previous forecast in which Zillow expected a modest increase (+0.5%).. With home prices currently up about +0.8% year-over-year. the new outlook points to slower momentum going into 2026 rather than a renewed rally.
The key change is less about a collapse and more about expectations.. Zillow’s national framing is that affordability may improve gradually as household income growth continues to outpace home price growth.. In practical terms. that means buyers could face less strain over time—especially if mortgage rates stay steady rather than jumping higher.. Zillow’s logic rests on a balance: demand that was pulled forward during the Pandemic Housing Boom can continue to work its way through the system. but the overheating phase is expected to keep cooling.
A flat national forecast, but regional differences tell the real story
A +0.0% national projection can sound uneventful, yet housing markets seldom move in lockstep.. Zillow’s nationwide map—covering more than 400 housing markets—highlights that some metros are still expected to gain. while others are forecast to fall meaningfully.. For homebuyers and sellers, that variation matters because it determines whether “cooling” is a minor slowdown or a deeper reset.
Among the largest metro areas Zillow covers. the metros expected to see the biggest price increases over the March 2026–March 2027 window include Syracuse. New York (+5.0%); Rockford. Illinois (+4.5%); and Atlantic City. New Jersey (+4.5%).. Other notable gain forecasts include Rochester, New York (+4.0%) and Knoxville, Tennessee (+3.4%).. The pattern is important: these increases are not massive “boom” numbers. but they suggest pockets where demand is likely to outlast supply pressure or where pricing has more room to recover.
On the other side, Zillow also flags metros where the outlook is clearly softer.. The steepest projected declines among the same set of large markets include Houma. Louisiana (-7.0%); Lake Charles. Louisiana (-5.6%); and Austin. Texas (-4.6%).. Other notable negative forecasts include New Orleans, Louisiana (-4.4%); Shreveport, Louisiana (-3.6%); and Denver, Colorado (-3.0%).. These figures don’t imply every local market is headed toward crisis. but they do indicate that some areas are expected to continue digesting prior price moves while affordability and buyer demand remain uneven.
Why Zillow’s downgrade matters for buyers, sellers, and mortgage-sensitive demand
Zillow’s update is essentially a signal about tempo.. A downward revision from +0.5% to +0.0% suggests the market is moving into a phase where pricing is less likely to accelerate—and more likely to hover around current levels.. That can be a relief for buyers who felt priced out during periods of faster appreciation. because slower price growth can gradually improve the relationship between wages and home costs.
Yet “improving affordability” is not an automatic guarantee.. Affordability depends on at least two variables: home prices and mortgage rates.. Zillow’s outlook assumes mortgage rates don’t spike.. If rates stay elevated for longer than expected. even flat price growth may not translate into easier monthly payments for buyers.. For existing homeowners. slower price growth can also change the calculus of whether to sell—particularly if they expect that waiting for a better buyer pool could mean either higher demand or fewer competing listings.
There’s also a financial-market angle.. Housing is a major transmission channel for consumer confidence and for household balance sheets.. When home prices grow more slowly. the “wealth effect” tends to weaken. which can influence consumption and downstream sectors like remodeling and home-furnishing retail.. On the other hand, a steady environment can support stability in local economies and reduce the risk of sudden reversals.
The near-term takeaway: softer, steadier—and uneven across the map
Zillow’s forecast keeps the national picture muted. but the market reality is sharper: some places are still expected to rise. while others are forecast to keep slipping.. That divergence is exactly why homeowners and investors can’t rely on broad headlines about “the housing market” as if it were one unified trend.
A human perspective makes the nuance clear.. Two families can face the same mortgage rate environment and national macroeconomic conditions. yet experience opposite outcomes depending on local supply. job growth. household formation. and even how quickly homes are moving.. In metros where Zillow expects stronger gains, competition may stay more intense.. In metros where Zillow expects declines. buyers may have more negotiating leverage—or fewer buyers willing to step in at current price expectations.
MISRYOUM’s view is that Zillow’s downgrade is best read as a caution against complacency: the market isn’t rolling over nationally. but the “easy money” phase of rapid appreciation is no longer the baseline.. Instead. 2026 looks like a year of regional sorting—where affordability trends and housing demand meet local fundamentals. and where the winners and laggards are decided block by block.
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