Zillow's latest report reveals that U.S. home prices have slowed to a mere 0.4% year-over-year increase, leading to lowered expectations for the market. The economists project a decline of 0.7% in home prices between May 2025 and 2026, contrasting with their earlier forecast. Factors contributing to this shift include increased inventory and a balanced market favoring buyers. Competition has diminished significantly, reflected in the lower number of existing home sales and more flexible negotiations for buyers.
With inventory up nearly 20% over the previous year, buyers had more options in May than at any time since July 2020. Despite higher sales, sellers still outnumber buyers.
Zillow economists predict soft national home price growth this year, projecting a decline of 0.7% between May 2025 and May 2026, with existing home sales limited to 4.1 million.
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