Zillow economists revised their forecast for U.S. home prices, projecting a 1.1% increase from January 2025 to January 2026, down from a 2.9% earlier prediction. This downward adjustment comes as new listings and higher inventory expectations exert downward pressure on home values. Furthermore, Zillow predicts that existing home sales will remain unchanged at 4.1 million through 2024, significantly below 2019 levels. As demand decreases due to high mortgage rates, rental markets will see increases as potential buyers extend their renting period, with anticipated rent growth of 3.7% for single-family homes.
Zillow's latest forecast anticipates home value growth in 2025 to be weaker than previously expected, as revised inventory expectations have put downward pressure on the forecast.
As elevated mortgage rates dampen demand for home purchases, many potential buyers are staying renters for longer, leading to projected rent increases of 3.7% for single-family homes in 2025.
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