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Zillow Forecasts Major Shift for Buyers and Sellers in 2026
Home values will rise just 0.7% by the end of 2026 — essentially flat — according to Zillow’s latest housing forecast released this month. That’s a dramatic downgrade from the 3.4% annual gains homeowners enjoyed in 2025 and a far cry from the double-digit appreciation of the pandemic years.
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For sellers, the message is clear: the easy money from simply owning a home is over. For buyers, this could be the shift you’ve been waiting for.
What Zillow’s Forecast Actually Says
Zillow’s March 2026 forecast projects that the typical U.S. home value — currently around $362,000 — will inch up to roughly $364,500 by December 2026. In inflation-adjusted terms, that’s actually a decline in real value.
The forecast factors in three key variables: mortgage rates remaining elevated above 6%, inventory continuing to build (slowly), and buyer demand staying below pre-pandemic norms due to affordability constraints.
Zillow’s economics team noted that sales activity for the full year depends heavily on how long rates stay elevated. If rates drop below 6% by summer, they project roughly 4.3 million existing home sales in 2026 — slightly above 2025’s pace. If rates stay near 6.5%, sales could actually decline to 3.9 million, which would be the lowest since 2011.
Regional Variation Is Huge
The national 0.7% figure masks significant regional differences. Zillow expects:
Markets likely to see price declines: Austin (-2.1%), San Antonio (-1.4%), Phoenix (-0.8%), and parts of Florida including Tampa (-1.2%) and Jacksonville (-0.9%). These are all markets that saw massive pandemic-era appreciation and are now giving some of it back as supply catches up to demand.
Markets still growing: Northeast and Midwest cities where inventory remains tight continue to see modest gains. Hartford (+3.2%), Providence (+2.8%), Milwaukee (+2.4%), and Buffalo (+2.6%) are all projected to outperform the national average.
The pattern is consistent: markets where builders ramped up construction during the pandemic are now dealing with oversupply, while older, supply-constrained markets are holding firm.
What This Means If You’re Buying
If you’ve been on the sidelines waiting for prices to drop, Zillow’s forecast suggests you shouldn’t expect a crash — but you also shouldn’t feel rushed. In most markets, prices are essentially treading water, which means time is on your side for the first time in years.
That gives you leverage to negotiate. Sellers who listed in spring 2025 expecting bidding wars are finding a very different market in 2026. Days on market have increased to 38 nationally (up from 29 a year ago), and the share of listings with price cuts hit 22.4% in February — the highest for any February since 2019.
If you’re starting the home-buying process, our complete home loan guide covers everything from pre-approval to closing in the current market.
What This Means If You’re Selling
If you were planning to sell and buy something bigger or move to a new city, the math hasn’t changed much — your existing home’s value is holding relatively steady, and the home you’re buying won’t be appreciating much either.
The bigger challenge for sellers is the lock-in effect. If you bought or refinanced between 2020 and 2022, you likely have a rate under 4%. Selling means giving up that rate and taking on a new mortgage at 6%+ — and that payment shock is what’s keeping millions of homeowners from listing.
Zillow estimates that 80% of homeowners with a mortgage have a rate below 5%, and 60% are below 4%. Until rates come down significantly, this dynamic will continue to suppress inventory.
Could the Forecast Be Wrong?
Yes, in either direction. Zillow’s model didn’t anticipate the Iran-driven rate spike that hit markets in March 2026. If that conflict escalates and rates push past 7%, home values could decline 1-2% nationally rather than growing. Conversely, if tensions ease and the Fed cuts rates aggressively in the second half of 2026, prices could accelerate back to 2-3% growth.
Zillow’s track record on national forecasts is decent — they’ve been within 1.5 percentage points of actual outcomes for the past three years — but their short-term accuracy at the metro level is less reliable. For rates and how they affect your specific situation, our mortgage rates guide stays up to date.
The Bottom Line
Zillow’s 2026 forecast paints a picture of a housing market in transition: not crashing, but not growing either. For buyers, that’s cautiously good news — you’re no longer racing against rapid appreciation. For sellers, it means pricing realistically and not expecting 2021-era bidding wars.
The wild card is interest rates. Everything in the housing market right now flows through one number: the 30-year fixed mortgage rate. If it drops, activity picks up and prices firm. If it stays above 6.5%, the market continues to cool. If you’re planning a move in either direction, comparing current lender rates is the most productive first step you can take.