Homes should be affordable in 20 major markets by year's end, the most since 2022
Rhea-AI Summary
Zillow (NYSE: Z) forecasts a mortgage on a typical home will be affordable in 20 of the 50 largest U.S. metros by Dec 2026, the most since 2022. Zillow cites slower home-price growth, falling mortgage rates and rising incomes as drivers. Key assumptions: mortgage rates near 6% by year-end, home values up 1.9% to a typical value of $365,795, and incomes rising 3.3%. Nationwide mortgage costs are down $92 year‑over‑year and should end 2026 near $2,358, with aggregate affordability improving from 32.6% to 31.8% of median income.
Positive
- Mortgage payment affordability improving to 20 metros by Dec 2026
- Nationwide monthly mortgage cost down $92 YoY
- Forecasted 1.9% home value growth to $365,795
- Projected incomes rising 3.3% (Bloomberg consensus)
Negative
- Nationwide mortgage share still ~31.8% of median income, above pre‑pandemic range
- New York remains highly unaffordable at 53.9% of median income
- Assumed 20% down payment (~$71,800 today) is a significant purchase barrier
- Affordability expected to worsen only in Hartford (expected share 33.6%)
News Market Reaction
On the day this news was published, Z gained 0.50%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
Z fell 1.87% with mixed peer moves: close peers like ZG (-3.02%), NBIS (-3.59%), PINS (-1.31%) and TME (-1.3%) declined, while BIDU rose 0.3%, suggesting pressure across several internet-content names but not a clean sector-wide move.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Jan 08 | Market heat ranking | Neutral | +2.6% | Named Hartford as hottest 2026 housing market based on Zillow metrics. |
| Dec 30 | Consumer trends report | Neutral | -0.7% | Reported online research now shapes most agent relationships and repeat buyers dominate. |
| Dec 30 | Wildfire exposure study | Neutral | -0.7% | Analyzed $45.9B in LA housing value within 2025 wildfire zones and related impacts. |
| Dec 18 | Affordability update | Neutral | -1.8% | Noted cooling listings and payments at 32.6% of income, best since August 2022. |
| Dec 17 | Search behavior review | Neutral | -1.9% | Released Zillow Zeitgeist 2025 on lifestyle-focused search trends and preferences. |
Recent Zillow news has focused on market analytics and consumer behavior. On Dec 18, 2025, Zillow highlighted a three-year high in affordability as mortgage payments fell to 32.6% of median income, which ties directly into this new forecast of further affordability gains to 31.8% by year-end. Other recent items covered hot markets such as Hartford, wildfire exposure in Los Angeles, and digital trends in agent relationships and home search behavior, reinforcing Zillow’s positioning as a housing-data and trends provider.
Market Pulse Summary
This announcement underscores Zillow’s view of a “small-wins” year for housing, with national mortgage payments at 32.6% of median income improving to a forecast 31.8%. It assumes modest 1.9% home value growth to $365,795 and highlights how rates near 6% and income gains support affordability in 20 of the 50 largest metros. Investors tracking Zillow’s role in housing data and tools may watch how these affordability trends influence user engagement and demand for its services.
Key Terms
zillow home value index (zhvi) financial
AI-generated analysis. Not financial advice.
Trifecta of slow-growing prices, falling mortgage rates and rising incomes inform Zillow's forecast
- The mortgage payment for a typical home should be affordable in 20 of the nation's 50 largest metros by December 2026, according to Zillow's projections, with
Chicago ,Atlanta andRaleigh joining the current list. - Affordability is expected to improve in every major market except
Hartford this year. Zillow recently predictedHartford will be the hottest housing market for 2026. - Monthly mortgage costs have fallen
$92 $177
Zillow expects slow but steady home value growth, falling mortgage rates and rising incomes to contribute to a nationwide improvement in affordability this year. Affordability in this case means a mortgage payment on a typical house that doesn't require more than
In the five years preceding the pandemic, mortgage payments (including taxes, insurance and maintenance) on a typical
Prices soared starting in 2020, and affordability declined sharply in 2022, when mortgage rates doubled. Affordability reached all-time lows in October 2023, when a typical mortgage required
At the national level, a mortgage payment now takes
"This is what a small-wins year looks like for housing," said Zillow Senior Economist Kara Ng. "Rising incomes, subdued price growth, and gradually easing mortgage rates would help buyers regain their footing while allowing homeowners to continue building wealth. These types of slow and steady affordability improvements are exactly what the housing market needs over the long-run."
Key assumptions for Zillow's forecast:
- Mortgage rates fall to near
6% , where Zillow expects them to end the year — although mortgage rates are notoriously volatile, and even further declines are possible. - Home values grow by
1.9% , with the typicalU.S. home value ending the year at$365,795 - Incomes are expected to rise by
3.3% this year, according to Bloomberg consensus estimates.
This forecast also assumes borrowers put
Using the average mortgage rate from December (
The only major metro where affordability is expected to worsen in 2026 is
Tips to improve personal affordability and shop within budget
Down payment assistance programs can help buyers clear that particular hurdle. By answering a few questions, shoppers on Zillow can see all the programs available for a particular listing.
"Preparation doesn't just make the process smoother — it can change the outcome," said Ng. "Knowing your numbers ahead of time helps buyers compete without overreaching. And for many first-time buyers, exploring down payment assistance programs on the Zillow listing is a low-effort way to clear a financial hurdle."
Mortgage rates play a major role in determining buying power. Zillow Home Loans' BuyAbilitySM tool tracks current rates to make sure search results stay within a shopper's set monthly budget.
Metro Area* | Zillow | Expected | Monthly | Expected | Share of | Expected |
1.9 % | 32.6 % | 31.8 % | ||||
1.5 % | 55.4 % | 53.9 % | ||||
1.4 % | 67.3 % | 65.4 % | ||||
1.8 % | 30.4 % | 29.7 % | ||||
0.3 % | - | 31.3 % | 30.1 % | |||
0.8 % | - | 29.8 % | 28.8 % | |||
0.1 % | - | 32.8 % | 31.5 % | |||
2.2 % | 31.9 % | 31.3 % | ||||
2.8 % | 46.7 % | 46.1 % | ||||
2.0 % | 30.6 % | 29.9 % | ||||
1.8 % | 44.0 % | 42.9 % | ||||
0.7 % | - | 33.2 % | 32.0 % | |||
-1.7 % | - | 56.8 % | 53.5 % | |||
2.2 % | 45.2 % | 44.3 % | ||||
2.0 % | 26.1 % | 25.5 % | ||||
0.4 % | - | 46.6 % | 44.9 % | |||
-0.3 % | - | 30.0 % | 28.7 % | |||
1.9 % | 57.6 % | 56.2 % | ||||
1.6 % | 35.3 % | 34.4 % | ||||
-1.1 % | - | 36.7 % | 34.7 % | |||
0.4 % | - | 29.3 % | 28.2 % | |||
1.7 % | 25.9 % | 25.2 % | ||||
1.9 % | 36.2 % | 35.4 % | ||||
2.6 % | 31.4 % | 30.9 % | ||||
-0.4 % | - | 28.9 % | 27.7 % | |||
-0.6 % | - | 39.1 % | 37.2 % | |||
-0.6 % | - | 41.2 % | 39.3 % | |||
0.0 % | - | 22.3 % | 21.4 % | |||
2.4 % | 28.6 % | 28.1 % | ||||
-1.9 % | - | 34.3 % | 32.2 % | |||
1.3 % | 36.3 % | 35.2 % | ||||
2.2 % | 29.4 % | 28.9 % | ||||
2.4 % | 30.0 % | 29.5 % | ||||
2.6 % | 27.0 % | 26.6 % | ||||
2.9 % | 28.1 % | 27.7 % | ||||
-0.6 % | - | 63.2 % | 60.2 % | |||
2.2 % | 35.2 % | 34.4 % | ||||
2.0 % | 32.9 % | 32.2 % | ||||
3.3 % | 46.1 % | 45.6 % | ||||
1.4 % | 32.3 % | 31.5 % | ||||
2.6 % | 34.8 % | 34.3 % | ||||
1.9 % | 26.9 % | 26.3 % | ||||
1.7 % | 30.4 % | 29.6 % | ||||
1.2 % | 27.7 % | 26.9 % | ||||
2.4 % | 33.3 % | 32.7 % | ||||
1.3 % | 27.2 % | 26.4 % | ||||
-4.5 % | - | 35.8 % | 32.8 % | |||
1.1 % | 37.9 % | 36.7 % | ||||
4.5 % | 33.5 % | 33.6 % | ||||
3.1 % | 26.6 % | 26.3 % | ||||
0.4 % | - | 24.2 % | 23.3 % |
*Table ordered by market size
1 This press release includes forward-looking statements about future housing market conditions, mortgage rates, and other economic factors. These statements are based on current expectations and assumptions, which are subject to change. Actual outcomes may differ materially due to changes in economic and market conditions. Forward-looking statements speak only as of the date of this release, and Zillow Group undertakes no obligation to update them.
2 The Zillow® market report is a monthly overview of the national and local real estate markets. The report is compiled by Zillow Research. For more information, visit zillow.com/research.
3 A "typical home" is one valued at Zillow's Home Value Index (ZHVI). It's the average of the middle-third of home values or Zestimates in a given area. Learn more at www.zillow.com/research/data/.
About Zillow Group
Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate app and website in
Zillow Group's affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Zillow Rentals®, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+℠, Spruce®, and Follow Up Boss®.
All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2025 MFTB Holdco, Inc., a Zillow affiliate.
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SOURCE Zillow
FAQ
How many metros does Zillow predict will be affordable by December 2026 for Z?
What is Zillow's national affordability forecast for 2026 and how does it compare today for Z?
What mortgage rate and home value assumptions underly Zillow's 2026 Z forecast?
How much have monthly mortgage costs changed year‑over‑year according to Zillow (Z)?
Which major metros join the affordable list in Zillow's Z forecast for 2026?
