Zillow has released an updated 12-month forecast for U.S. home prices, signaling a subdued market ahead. The real estate platform now expects the Zillow Home Value Index to shift -0.2% between May 2026 and May 2027.
The revision marks a small but notable decline from earlier projections. In April, Zillow forecasted +0.1% growth, and in March it predicted +0.5%, indicating a steady pullback in expectations.
Currently, national home prices are up 0.8% year over year, a modest pace that Zillow's latest outlook suggests will persist. The forecast implies prices will remain near that subdued level, with growth trailing U.S. wage growth of 3.5%.
Analysts describe the outlook as neither negative nor bullish. If wage growth continues to outpace home price appreciation and mortgage rates stay stable, housing affordability could gradually improve, smoothing out distortions from the pandemic-era boom.
The forecast applies to more than 400 housing markets, offering a broad view of a cooling sector. Experts caution that any sudden spike in mortgage rates could upend the gradual improvement trend.