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Zillow economists just published their updated 12-month forecast, projecting that U.S. home prices—as measured by the Zillow Home Value Index—will rise 0.5% from February 2026 to February 2027.
That’s a mild downward revision from its 12-month forecast published last month (+0.9%).
While Zillow’s national home price forecast isn’t negative, it isn’t exactly bullish either. It foresees a soft national housing market in 2026, one where affordability may improve slightly as U.S. income growth outpaces U.S. home price growth.
What type of regional variation does Zillow anticipate in 2026?
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Among the 300 largest U.S. metro-area housing markets, Zillow expects the biggest home price increase from February 2026 to February 2027 to occur in these 15 metros:
- Rockford, Illinois → +5.1%
- Syracuse, New York → +4.6%
- Atlantic City, New Jersey → +4.6%
- Knoxville, Tennessee → +3.9%
- Rochester, New York → +3.8%
- Green Bay, Wisconsin → +3.8%
- Appleton, Wisconsin → +3.8%
- Wausau, Wisconsin → +3.7%
- Morristown, Tennessee → +3.7%
- Janesville, Wisconsin → +3.5%
- Norwich, Connecticut → +3.4%
- Vineland, New Jersey → +3.3%
- Pottsville, Pennsylvania → +3.3%
- Hartford, Connecticut → +3.2%
- New Haven, Connecticut → +3.2%
Among the 300 largest U.S. metro-area housing markets, Zillow expects the biggest home price decline from February 2026 to February 2027 to occur in these 15 metros:
- Houma, Louisiana → -7.0%
- Lake Charles, Louisiana → -4.5%
- New Orleans → -3.8%
- Austin → -3.6%
- Alexandria, Louisiana → -3.2%
- Lafayette, Louisiana → -3.0%
- Beaumont, Texas → -3.0%
- Chico, California → -2.9%
- Shreveport, Louisiana → -2.8%
- Denver → -2.6%
- Boulder, Colorado → -2.5%
- San Francisco → -2.4%
- Punta Gorda, Florida → -2.4%
- Santa Rosa, California → -2.3%
- Vallejo, California → -2.3%
U.S. home prices, as measured by the Zillow Home Value Index, are currently up 0.4% year over year. If Zillow’s latest 12-month outlook (+0.5%) comes to fruition, it would represent another year in a nationally aggregated soft housing market.
Below is what the current year-over-year rate of home price growth looks like for single-family homes and condos. The Sunbelt, in particular Southwest Florida, is currently the epicenter of housing market weakness.
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“As the housing market moves toward balance, new listings and sales are expected to increase at roughly the same pace. That closer alignment between supply and demand should help keep home values relatively stable overall,” wrote a Zillow economist in a March 13 report. “Existing home sales are now projected to reach 4.24 million in 2026, a small upward revision from last month’s estimate of 4.2 million. Moderately easing mortgage rates are expected to unlock some pent-up demand, supporting a modest rebound in transactions. Even with this improvement, sales are expected to remain below historical norms.”
