Zillow's updated forecast model projects a modest 0.8% rise in U.S. home prices between February 2025 and February 2026. This marks a decline from prior forecasts, reflecting increased active listings and lingering affordability challenges that are causing potential buyers to delay purchases. Zillow also predicts only 4.1 million existing home sales for 2025, suggesting a continued trend of suppressed home sales compared to pre-pandemic data. While a seasonal sales boost may occur in spring, high mortgage rates continue to hinder overall market activity.
Zillow economists predict a 0.8% increase in U.S. home prices, indicating a continued trend of soft price growth due to rising listings and buyer affordability challenges.
With potential buyers facing affordability challenges, many are choosing to rent longer instead of entering the market, suppressing overall home purchase demand.
Zillow anticipates only 4.1 million existing home sales in 2025, marking three consecutive years of below-normal sales, significantly lower than pre-pandemic figures.
The upcoming housing season might see a brief sales increase in spring, but without adequate mortgage rate relief, sales are expected to remain below 2019 levels.
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