Zillow updates home price forecast for over 400 housing markets: See the map

Today’s ResiClub letter is brought to you by Stessa!

Track Every Dollar with Stessa—Effortlessly

Managing rental property finances doesn’t have to be a headache. With Stessa, real estate investors can simplify accounting, automate transaction tracking, and stay organized—all in one powerful, easy-to-use platform. Link your bank accounts, property managers, and financial institutions for a clear, accurate financial picture across your entire portfolio.

Stessa also makes bookkeeping stress-free. Track income and expenses by property or portfolio, scan and retrieve receipts on the go, and ensure every transaction is categorized to maximize your deductions. Whether you're managing a portfolio locally or spread out across the country, Stessa keeps you in control from virtually anywhere.

📹 Watch the Demo and see how Stessa can streamline your rental property finances.

✅ Sign Up for Free — Your transactions. Your deductions. Simplified.

This week, Zillow economists published their updated 12-month forecast, projecting that U.S. home prices—as measured by the Zillow Home Value Index—are likely to fall by -1.0% between June 2025 and June 2026. For calendar year 2025, they forecast U.S. home prices, as measured by the Zillow Home Value Index, will fall -2.0%. 

Heading into 2025, Zillow’s 12-month forecast for U.S. home prices was +2.6%. However, many housing markets across the country softened faster than expected, prompting Zillow to issue several downward revisions. While Zillow has since stopped cutting its outlook, it is still kind of mildly bearish (or at least not bullish) over the short-term.

Why did Zillow downgrade its forecast for national home prices so many times this year?

“The rise in [active] listings is fueling softer [home] price growth, as greater supply provides more options and more bargaining power for buyers,” Zillow economists wrote in March. “Potential buyers are opting to remain renters for longer as affordability challenges suppress demand for home purchases.” 

Essentially, Zillow believes that strained housing affordability—driven by U.S. home prices soaring over 40% during the Pandemic Housing Boom and mortgage rates jumping from 3% to 6% in 2022—is putting upward pressure on active inventory growth and short-term downward pressure on home price growth.

“Sellers have been motivated to join the market through the first half of the year, but buyer demand hasn’t kept up. With housing inventory accumulating, Zillow forecasts home values will decline by 2.0% in [calendar year] 2025,” wrote Zillow economists on Wednesday. “Slightly lower mortgage rates toward the end of the year could further aid affordability, but significant improvements appear unlikely. Still, home shoppers have some advantages–plenty of options have given them more bargaining power than in any summer in at least seven years.”

Click here to view an interactive version of the map below

Among the 300 largest U.S. metro area housing markets, Zillow expects the strongest home price appreciation between June 2025 and June 2026 to occur in these 10 areas.

1. Atlantic City, NJ → 2.9%

2. Kingston, NY → 2.2% 

3. Knoxville, TN → 2.0% 

4. Torrington, CT → 1.9% 

5. Rockford, IL → 1.7% 

6. Concord, NH → 1.7% 

7. Pottsville, PA → 1.7%

8. Fayetteville, AR → 1.6% 

9. Norwich, CT → 1.6% 

10. East Stroudsburg, PA → 1.5%

Among the 300 largest U.S. metro area housing markets, Zillow expects the weakest home price appreciation between April 2025 and April 2026 to occur in these 10 areas.

1. Houma, LA → -9.6

2.  Lake Charles, LA → -9.5%

3.  Alexandria, LA → -8.0% 

4. New Orleans, LA → -7.2%

5.  Lafayette, LA → -7.0% 

6. Shreveport, LA → -6.9% 

7. Beaumont, TX  → -6.5% 

8. San Francisco, CA → -6.1% 

9. Austin, TX → -5.1% 

10. Corpus Christi, TX → -5.0

Below is what the current year-over-year rate of home price growth looks like for single-family and condo home prices. The Sun Belt, in particular Southwest Florida, is currently the epicenter of housing market weakness right now. 

Click here to view an interactive version of the map below

My thoughts on Zillow’s updated regional forecast?

There’s a great deal of bifurcation in the housing market right now [see map above]. With housing markets that have seen a greater shift in their supply-demand equilibrium, as measured by active inventory growth and months of supply—have seen a greater weakening. While housing markets that have seen a slower build in active inventory has seen a more gradual softening and deceleration in home price growth.

My biggest pushback against the Zillow forecast model—and this has been the case for a few years now—is that it has struggled to capture the regional variations that are fairly apparent when simply looking at absorption, active inventory, and months of supply. Heading into the year, in particular, I thought Zillow was underplaying the weakening in Florida.

Here’s the current rate of year-over-year U.S. home price growth across 6 major national home price indices.

In total, 96 housing executives, professionals, and investors have registered for ResiDay 2025. Here's the breakdown by metro area. ResiDay 2025 takes place on Friday, November 7th, in New York City.

For the next few weeks, we’re selling Early Bird tickets ($99) for ResiDay 2025 (150% of the $250 price tag). [ResiClub PRO members can attend for $49]

Companies interested in ResiDay 2025 sponsorship opportunities should email: [email protected]