Zillow downgrades its home price forecast. Here’s its outlook for 400-plus housing markets

Want more housing market stories from Lance Lambert’s Resi Club in your inbox? Subscribe to the Resi Club newsletter. Zillow economists just published their updated 12-month forecast, projecting that U.S. home prices—as measured by the Zillow Home Value Index—will shift -0.2% between May 2026 and May 2027. That’s a tiny downward revision from its 12-month national forecast published in April (+0.1%) and its 12-month national forecast published in March (+0.5%). U.S. home prices, as measured by the Zillow Home Value Index, are currently up 0.8% year over year. Zillow’s latest 12-month outlook (-0.1%) expects national home prices to remain near that subdued pace. As long as national home price growth remains below U.S. wage growth (currently up 3.5%), underlying fundamentals should continue to improve as overheating from the pandemic housing boom gets smoothed out. If that trend continues—and mortgage rates don’t spike—national housing affordability should also continue to gradually improve. While Zillow’s national home price forecast isn’t negative, it isn’t exactly bullish either. Analysts are predicting a soft national housing market in 2026, one where national housing affordability may improve slightly as U.S. income growth outpaces U.S. home price growth. What type of regional variation does Zillow anticipate over the next 12 months? (function(){function e(){window.addEventListener(`message`,function(e){if(e.data[`datawrapper-height`]!==void 0){var t=document.querySelectorAll(`iframe`);for(var n in e.data[`datawrapper-height`])for(var r=0,i;i=t[r];r++)if(i.contentWindow===e.source){var a=e.data[`datawrapper-height`][n]+`px`;i.style.height=a}}})}e()})(); Among the 300 largest U.S. metro-area housing markets, Zillow forecast the biggest home price increase between May 2026 and May 2027 to occur in these 15 metros: Rockford, Illinois → 4.3% Syracuse, New York → 4.2% Utica, New York → 3.7% Atlantic City, New Jersey → 3.6% Rochester, New York → 3.4% Binghamton, New York