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Zillow economists simply revealed their up to date 12-month forecast, projecting that U.S. dwelling costs—as measured by the Zillow Dwelling Worth Index—will shift -0.2% between Might 2026 and Might 2027.
That’s a tiny downward revision from its 12-month nationwide forecast revealed in April (+0.1%) and its 12-month nationwide forecast revealed in March (+0.5%).
U.S. dwelling costs, as measured by the Zillow Dwelling Worth Index, are currently up 0.8% year over year. Zillow’s newest 12-month outlook (-0.1%) expects nationwide dwelling costs to stay close to that subdued tempo.
So long as nationwide dwelling worth progress stays beneath U.S. wage growth (presently up 3.5%), underlying fundamentals ought to proceed to enhance as overheating from the pandemic housing growth will get smoothed out. If that development continues—and mortgage charges don’t spike—nationwide housing affordability must also proceed to regularly enhance.
Whereas Zillow’s nationwide dwelling worth forecast isn’t damaging, it isn’t precisely bullish both. Analysts are predicting a delicate nationwide housing market in 2026, one the place nationwide housing affordability could enhance barely as U.S. earnings progress outpaces U.S. dwelling worth progress.
What kind of regional variation does Zillow anticipate over the subsequent 12 months?
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Among the many 300 largest U.S. metro-area housing markets, Zillow forecast the most important dwelling worth improve between Might 2026 and Might 2027 to happen in these 15 metros:
- Rockford, Illinois → 4.3%
- Syracuse, New York → 4.2%
- Utica, New York → 3.7%
- Atlantic Metropolis, New Jersey → 3.6%
- Rochester, New York → 3.4%
- Binghamton, New York → 3.3%
- Youngstown, Ohio → 3.0%
- Erie, Pennsylvania → 2.9%
- Pottsville, Pennsylvania → 2.9%
- Knoxville, Tennessee → 2.8%
- Norwich, Connecticut → 2.8%
- Saginaw, Michigan → 2.7%
- Janesville, Wisconsin → 2.7%
- Vineland, New Jersey → 2.7%
- Morristown, Tennessee → 2.7%
Among the many 300 largest U.S. metro-area housing markets, Zillow forecast the most important dwelling worth decline between Might 2026 and Might 2027 to happen in these 15 metros:
- Houma, Louisiana → -6.6%
- Austin → -6.1%
- Lake Charles, Louisiana → -5.3%
- New Orleans → -4.8%
- Alexandria, Louisiana → -4.1%
- Chico, California → -4.0%
- Punta Gorda, Florida → -3.7%
- Lafayette, Louisiana → -3.6%
- Vallejo, California → -3.5%
- Santa Rosa, California → -3.2%
- Beaumont, Texas → -3.2%
- San Francisco → -2.9%
- San Antonio → -2.9%
- Stockton, California → -2.9%
- Texarkana, Texas → -2.9
Fast take: Based mostly alone evaluation, I imagine Zillow is simply too short-term bearish on the New Orleans metro-area housing market, which is displaying indicators of delicate tightening after passing by means of a correction, and in addition too bearish on pockets of the Bay Space—particularly San Francisco correct—which has benefited from AI growth spillover (though pockets of Oakland stay weak).
Under is what the present year-over-year fee of dwelling worth change appears like for single-family and condominium dwelling costs. The Sunbelt, specifically Southwest Florida, is presently the epicenter of housing market softness over the previous yr.
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