Zillow Cuts 2026 Home Sales Forecast From 3.4% to 0.5%
Zillow's April 22 release dropped its 2026 existing-home-sales forecast to 0.5% YoY growth, citing elevated mortgage rate expectations.
0.5%. That's the pace Zillow now expects existing-home sales to grow in 2026, down from the 3.4% it projected last month — a 2.9-percentage-point cut in a single monthly revision. The April 22 release cites "upward revisions to mortgage rate expectations, driven by persistent inflation concerns" keeping borrowing costs elevated.
The 12-month home-value outlook moved alongside it — from +0.5% in last month's release to +0.0% flat through March 2027, per Zillow's ZHVI forecast covering more than 400 metros. Current year-over-year ZHVI sits at +0.8%, meaning the revision calls an end to post-pandemic appreciation rather than a reversal.
Regional dispersion tells the deeper story. The strongest and weakest metros in the new forecast:
Strongest (YoY through Mar 2027) | Weakest |
|---|---|
Syracuse, NY: +5.0% | Houma, LA: −7.0% |
Janesville, WI: +3.0% | San Antonio, TX: −2.6% |
ResiClub's Lance Lambert pushed back on one part of the call: "Based on my own analysis, I believe Zillow is too bearish on the New Orleans metro area...and also too bearish on pockets of the Bay Area—especially San Jose." The 12-point spread between Syracuse and Houma underscores that the national revision masks divergent local fundamentals.
For builders and resale operators, the revision compresses the volume tailwind modeled into 2026 plans. December 2025's Zillow release framed the coming year as a warming one — "sales will strengthen in 2026 as mortgage rates trend lower and affordability improves." Four months and three revisions later, that thesis is effectively retired.
Also moving
- ResiClub's April 18 metro analysis showed 89 of the 300 largest housing markets posting year-over-year price declines through March 2026. Austin sits 27.8% below its 2022 peak; Hartford is 22.5% above. Among the 50 largest metros, 24 (48%) are posting negative year-over-year growth.
- Zillow's December 2025 release projected 2.0% national ZHVI growth for 2026. The April 22 cut to 0.0% represents the second downward revision in four months.
Editor's Read
Zillow isn't calling a crash. It's removing the keel. The March forecast assumed mortgage-rate relief and affordability improvement; the April forecast assumes neither. I'm watching whether the May release keeps moving in the same direction — consecutive revisions in one direction is how forecasts become consensus.
Data sources: Zillow Research — Home Value and Home Sales Forecast (April 2026), ResiClub Analytics.
CES is the BLS monthly survey of business payrolls that produces nonfarm employment counts at the national, state, and metro level — the establishment-based counterpart to LAUS unemployment data.
Read definition →BEA is the U.S. Department of Commerce agency that publishes GDP, personal income, and regional economic data — the numbers you use to tell whether a metro's economy is growing, which sectors drive it, and whether local income can support current rents.
Read definition →Rent is the periodic payment a tenant makes to a landlord in exchange for the right to occupy a property -- the single revenue line that funds your mortgage, expenses, and profit as a rental property investor.
Read definition →A lease is a legally binding contract between a landlord and a tenant that grants the tenant exclusive use of a property for a specified period in exchange for rent — establishing every right, obligation, and financial term that governs the rental relationship.
Read definition →An operator is the person or firm responsible for finding, financing, and executing a real estate syndication deal. They source the property, arrange the debt, raise equity from passive investors, manage the business plan, and handle the eventual sale or refinance.
Read definition →FFO (Funds from Operations) is the standard metric used to measure a REIT's recurring operating performance. It adjusts net income by adding back non-cash depreciation and amortization charges and subtracting one-time gains from property sales, leaving behind a number that reflects the actual cash-generating power of the underlying real estate portfolio.
Read definition →Sophia Warren
Residential Investment Analyst & News Editor
My realm is residential real estate investment, with a knack for spotting gems in emerging markets. I also edit the REI Prime daily news desk, where I translate federal data releases and operator signals into actionable briefs for small investors. Beyond properties, my world blooms in urban gardens and thrives in crafting stylish interiors.
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