Home value forecast takes a rare negative turn
Zillow’s predicted difference from March 2025 to March 2026 went from barely positive to down 1.7%. And ongoing economic uncertainty isn’t helping.
With new listings up significantly and sales not keeping pace, Zillow is forecasting home values will fall in the next 12 months — something that has happened just one other time since mid-2012.
The decline between March 2025 to March 2026 is predicted to be 1.7%, according to Zillow's Home Value Forecast. That's a downward revision from its previous forecast, which predicted a 0.6% increase.
Except for a one-month, year-over-year dip in June 2023, the last time Zillow's home value chart was negative year-over-year was in June 2012.
What's driving the anticipated decline? The forecast is based on what's happening with listings and sales, as well as what's happening in the economy.
"With the dip in stock portfolios, challenged affordability, and continuing economic uncertainty, more potential buyers may adopt a 'wait and see' approach regarding significant purchases like homes, putting downward pressure on home prices," said Kara Ng, a senior economist at Zillow.
In March, more than 375,000 homes went on the market, while 265,000 went pending, according to Zillow's monthly report. This mismatch pushed inventory to 1.15 million homes, the highest for the month of March since 2020.
"More sellers came out to test their luck as rates ticked down in March, but home sales didn't keep up," said Skylar Olsen, chief economist at Zillow.
Sellers have also begun slashing prices. Last month, prices on 23.5% of the listings on Zillow were cut — the highest March percentage since at least 2018.
How markets are faring across the country: For many metros studied by Zillow, year-over-year home value drops are a reality. Sixteen of the top 50 metros have seen declines, with the largest being Austin, Texas, where year-over-year home values were down 4.6%. Home values were also down 4.5% in Tampa, Florida, and 2.7% in San Antonio, Texas.
However, the majority of the top 50 metros have seen price increases. San Jose, California, led the way, with home values up 5.5%. Cleveland, Ohio, was next (up 5.3%), followed by Providence, Rhode Island (up 5.2%). Despite the recent slowdown, it's still a seller's market overall, the report indicated.