Zillow Lowers Home Price Forecast to -0.2%

Zillow economists have revised their 12-month home price forecast, now projecting a -0.2% shift in U.S. home prices between May 2026 and May 2027. This represents a slight downward adjustment from the April forecast of +0.1% and the March forecast of +0.5%. Currently, U.S. home prices, as measured by the Zillow Home Value Index, have seen a year-over-year increase of 0.8%. The updated outlook suggests national home prices will continue to grow at a subdued pace, remaining below U.S. wage growth, which is currently at 3.5%. This trend, if sustained and coupled with stable mortgage rates, is expected to lead to gradual improvements in national housing affordability.

The revised forecast indicates a soft national housing market for 2026, with income growth anticipated to outpace home price appreciation. This scenario could lead to a slight enhancement in housing affordability across the country. Zillow's analysis also provides a regional outlook, identifying specific metropolitan areas expected to experience the most significant home price increases over the next 12 months. Among the 300 largest U.S. metro-area housing markets, Zillow forecasts the highest price appreciation between May 2026 and May 2027 in Rockford, Illinois, with an expected increase of 4.3%. Other metros projected to see substantial growth include Syracuse, New York (4.2%), Utica, New York (3.7%), Atlantic City, New Jersey (3.6%), and Rochester, New York (3.4%).