Zillow economists say the housing market will warm up in 2026, with more sales and modest price growth

Rhea-AI Summary

Zillow (NYSE: Z) forecasts a modest housing rebound in 2026 driven by improving affordability. Key projections: home values +1.2%, existing home sales 4.26M (+4.3%), and the share of major metros with annual price declines falling from 24 to 12. Mortgage rates are expected to remain above 6%. Multifamily rents are forecast to rise 0.3% while single-family rents climb 2.3%. Single-family construction starts are trending 5% below last year with a possible further 2% drop in 2026.

Positive

• Home values forecasted to rise 1.2% in 2026
• Existing home sales projected at 4.26M (+4.3%)
• Major markets with declines cut from 24 to 12
• Multifamily rents expected to be nearly flat at +0.3%

Negative

• Mortgage rates unlikely to fall below 6% in 2026
• Single-family starts trending 5% below last year
• 2026 could be the weakest year for single-family starts since 2019
• New York City rents expected to accelerate versus national trend

News Market Reaction

-0.78%

1 alert

-0.78% News Effect

On the day this news was published, Z declined 0.78%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Home value growth: 1.2% Markets with price declines: 24 to 12 Existing home sales: 4.26 million +5 more

8 metrics

Home value growth 1.2% Forecast U.S. home value increase in 2026

Markets with price declines 24 to 12 Major markets with annual price drops, current vs. next year forecast

Existing home sales 4.26 million Projected 2026 existing home sales, up 4.3% vs. 2025

Sales growth 4.3% Forecast increase in existing home sales vs. 2025

Multifamily rent growth 0.3% Forecast 2026 multifamily rent change

Single-family rent growth 2.3% Forecast 2026 single-family rent increase

Rent-to-income share 27.2% Share of median income spent on typical U.S. rent as of October

Single-family starts trend 5% below, further 2% drop Single-family construction starts vs. last year and potential 2026 decline

Market Reality Check

Price: $43.97 Vol: Volume 2,735,161 is 1.14x...

normal vol

$43.97 Last Close

Volume Volume 2,735,161 is 1.14x the 20-day average of 2,401,287, showing moderately elevated activity ahead of this outlook. normal

Technical Price at $75.78 is trading above the 200-day MA of $74.02, with shares sitting 19.28% below the 52-week high and 31.77% above the 52-week low.

Peers on Argus

Z gained 1.26% with modestly above-average volume while key peers were mixed: ZG...

Z gained 1.26% with modestly above-average volume while key peers were mixed: ZG -0.26%, PINS -2.25%, NBIS +5.7%, BIDU +1.13%, TME +1.39%. No peers appeared in the momentum scanner and no same-day peer headlines were recorded, suggesting today’s move was more company-specific than a broad sector rotation.

Historical Context

5 past events · Latest: Dec 04 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Dec 04	Housing outlook report	Positive	-0.8%	Zillow economists project modest 2026 rebound in home values and sales.
Dec 02	Conference appearance	Positive	+5.4%	Announcement of CEO fireside chat at major Barclays tech conference.
Nov 24	Conference appearance	Positive	+3.1%	CFO scheduled to speak at UBS Global Technology and AI Conference.
Nov 24	Market research note	Neutral	+0.9%	Analysis highlighting record listing discounts and pricing trends across metros.
Nov 20	Policy research note	Negative	-1.8%	Report on private listings reinforcing segregation in Chicago-area housing.

Pattern Detected

Recent news has often aligned with price moves, with four aligned reactions and one divergence. Conference participation and data-driven housing research have generally coincided with positive or modestly positive returns, while today’s macro housing forecast previously saw a slight negative reaction, marking a divergence from its constructive tone.

Recent Company History

Over the last few weeks, Zillow has issued several data- and event-driven updates. On Nov 20, a study on private listings and segregation highlighted structural housing risks and coincided with a -1.77% move. Subsequent research on record listing discounts on Nov 24 and multiple tech conference appearances aligned with modest to strong gains up to +5.44%. Today’s forecast of a modest 2026 housing rebound, including 1.2% home value growth and 4.26M existing sales, fits this pattern of Zillow positioning itself as a key housing data and insights provider.

Market Pulse Summary

This announcement outlines Zillow’s view of a gradually stabilizing housing market in 2026, with for...

Analysis

This announcement outlines Zillow’s view of a gradually stabilizing housing market in 2026, with forecast home value growth of 1.2%, existing home sales rising to 4.26M, and multifamily rents edging up only 0.3%. The company also notes construction starts running 5% below last year with a possible further 2% decline, and rent burdens easing to 27.2% of median income. Investors may watch how these macro assumptions intersect with Zillow’s Q3 trends in Rentals, Residential traffic, and Mortgages revenue.

Key Terms

Zestimate, multifamily, single-family, zero-energy-ready homes, +2 more

6 terms

Zestimate technical

"fewer homeowners will see their Zestimate® fall below what they paid"

An online automated estimate of a residential property's current market value calculated from public records, user-submitted details, and algorithmic models. Think of it like a quick, computerized appraisal or a car's Kelley Blue Book price: it gives a fast snapshot of what a house might sell for. Investors use it as a preliminary signal of housing market trends, comparable values and demand, but it should be checked against professional appraisals and local knowledge.

multifamily technical

"Rent affordability is expected to improve in 2026, with multifamily rents forecast"

Multifamily describes residential properties that contain multiple separate living units under one ownership, such as apartment buildings, duplexes, triplexes or condo complexes. Investors care because a single property can produce income from many tenants at once, smoothing cash flow much like a small rental fleet rather than one standalone house, and offering scale benefits, diversified tenant risk, and sensitivity to rental market trends that affect returns and asset value.

single-family technical

"2026 is shaping up to be the slowest year for single-family home construction"

A single-family property is a standalone residential building designed for one household, like a detached house with its own yard, utilities, and entrance — think of it as the private house version of housing compared with an apartment in a shared building. Investors care because these homes behave differently from multi-unit buildings: they appeal to owner-occupiers and long-term renters, have distinct maintenance and financing patterns, and can affect rental income, resale value, and mortgage risk in a property portfolio.

zero-energy-ready homes technical

"Energy-efficient features such as zero-energy-ready homes, whole-home batteries"

Zero-energy-ready homes are buildings designed to use very little energy through efficient construction and systems, so they can easily achieve zero net energy use when supplemented with renewable energy sources like solar panels. For investors, these homes represent a growing market for sustainable properties that can reduce energy costs and appeal to environmentally conscious buyers, potentially increasing long-term value and resilience against rising energy prices.

whole-home batteries technical

"Energy-efficient features such as zero-energy-ready homes, whole-home batteries"

Whole-home batteries are large rechargeable energy storage systems designed to power an entire residence by storing electricity from the grid or rooftop solar and releasing it when needed. Like a household water tank for electricity, they provide backup power during outages, reduce bills by shifting usage to cheaper times, and can participate in utility programs, so investors watch them for demand growth, cost declines, and regulatory incentives that affect returns.

EV charging stations technical

"zero-energy-ready homes, whole-home batteries and EV charging stations"

Electric vehicle charging stations are sites or devices that replenish a car’s battery by delivering electricity, ranging from slow home chargers to high-speed public units at parking lots or roadside hubs. Investors care because charging networks act like the gas stations of the electric era: their availability and pricing influence how quickly people switch to electric cars, create steady customer fees, affect electricity demand, and open opportunities across utilities, real estate and transportation businesses.

AI-generated analysis. Not financial advice.

Zillow predicts a slight uptick in home sales as pent-up demand meets improved affordability

• Home values are forecast to rise 1.2% in 2026, with the number of major markets seeing annual price declines projected to fall from 24 markets as of October to 12 next year.
• Zillow projects 4.26 million existing home sales next year — a 4.3% increase over 2025 — as improving affordability brings more demand back to the market.
• Rent affordability is expected to improve in 2026, with multifamily rents forecast to remain flat — up just 0.3%.

SEATTLE, Dec. 4, 2025 /PRNewswire/ -- Economists at Zillow® expect 2026 to bring steadier footing to the housing market as affordability improves and the ways Americans want to live continue to evolve.

On the heels of a year of small wins for home buyers — slight affordability gains and buyer-friendly markets in 19 major metro areas — home buyers and sellers can expect a modest rise in home values, a few more sales and mortgage rates holding above 6%. Many apartment renters should look forward to some affordability relief; however, those in New York City should not.

"The housing market is finally settling into a healthier state, with buyers and sellers starting to return," said Mischa Fisher, chief economist at Zillow. "Buyers are benefiting from more inventory and improved affordability, while sellers are seeing price stability and more consistent demand. Each group should have a bit more breathing room in 2026."

Home values will rise modestly
Zillow economists expect U.S. home values to grow 1.2% in 2026, after national values were generally flat in 2025. Next year's forecast reflects expectations of gradually improving affordability and steady buyer demand. Mortgage costs should ease a bit in 2026, helping more buyers stay in the market and supporting modest price growth in many parts of the country.

Fewer owners will be underwater as prices firm up
With home values expected to rise in most major markets, fewer homeowners will see their Zestimate® fall below what they paid for their home. This stands in contrast to 2025, when home values have fallen in 24 of the 50 largest markets, as of October — a number Zillow forecasts will be cut by half to 12 major markets next year. Stabilizing prices mean more homeowners will continue building equity rather than losing it, at least on paper.

Mortgage rates will hold above 6%
Even for the experts, foreseeing mortgage rates a year out is about as difficult as predicting next year's weather forecast. However, mortgage rates are shaped in part by inflation, and Zillow has been accurately predicting shelter inflation, which makes up 40% of the consumer price index. Because of that, Zillow economists are willing to put themselves on the record: Mortgage rates are unlikely to fall below 6% in 2026.

Borrowers have already seen some relief this year, pushing affordability to a three-year best. Gradual rate moderation should help more buyers reenter the market, even if ultralow pandemic-era rates remain far out of reach.

Existing home sales will climb slightly
Zillow forecasts 4.26 million existing home sales in 2026, a 4.3% increase from this year's projected total. Years of limited inventory and high mortgage rates have created a pent-up demand to move that should start to release as affordability improves. A stronger-than-expected fall season has hinted at what's possible this spring if recent affordability gains persist.

New construction will see its weakest year since before the pandemic
2026 is shaping up to be the slowest year for single-family home construction starts since 2019, following a notably weak year in 2025. Because there's a large stock of new homes already built and others still under construction, builders are expected to hold back on starting new projects.

Single-family starts are trending 5% below last year's pace, as of the latest reading in August. A further 2% drop from that pace in 2026 would bring starts below the roughly 947,000 homes begun in 2023, currently the low-water mark since the start of the pandemic. Expect builders to continue leaning heavily on incentives such as rate buydowns to keep inventory moving, particularly in markets where affordability remains tight.

Apartment renters will see relief
Rent affordability is expected to continue improving in most of the country after a year in which 37 of the 50 biggest markets saw incomes grow faster than rents. A median-income household would spend 27.2% of income on the typical U.S. rent as of October, the lowest share since August 2021. Zillow forecasts multifamily rents to rise just 0.3% in 2026, giving incomes a chance to catch up even further. Single-family rents are projected to climb 2.3% as many buyers delay home purchases.

New York City is a notable exception: StreetEasy® economists expect rent growth there to accelerate next year, bucking the national trend.

The lifestyle renter will emerge as a force
For a growing share of Americans, renting is a deliberate choice that supports mobility, reduces home maintenance burdens and better fits the way they want to live. Nearly 3 in 5 renters say they plan to keep renting next year, according to the Zillow Consumer Housing Trends Report. Even if mortgage rates dropped, only 37% say they would buy, down from 45% last year.

"Kidfluence" will steer rental demand
Lifestyle renting and affordability realities are changing who rents and what they need from their homes. Thirty-seven percent of renters now have a child younger than 18 at home — up from 33% a year ago, according to the Zillow Consumer Housing Trends Report. With Generation Alpha influencing close to half of their parents' spending — not quite six in seven dollars, but still a sizable chunk — families are bringing those preferences into housing decisions as well. With parents making up roughly one-third of today's apartment shoppers, buildings that offer family-friendly amenities like "imagination centers" or "homework pods" will be better positioned to compete.

In New York City, StreetEasy experts expect communal spaces to become defining features of the rental landscape in 2026 and beyond.

Inflation-savvy home features are becoming mainstream
Rising household expenses will continue reshaping what buyers look for in a home. Energy-efficient features such as zero-energy-ready homes, whole-home batteries and EV charging stations are appearing more frequently in listings. Zillow predicts families will gravitate toward homes that are energy-efficient and grocery-optimized — think walk-in pantries, garage-based cold zones for bulk storage, refrigerated drawers and smart organization systems that help families shop smarter and keep food fresh longer.

AI will evolve from helpful assistant to transaction coordinator
In 2026, AI will move beyond offering advice and begin coordinating steps in the buying, selling and renting processes. Instead of simply recommending actions, AI assistants will help manage tasks end to end — from connecting buyers and sellers with the right real estate agents to tour scheduling, to negotiations and closing prep. This "agentic" approach will streamline decisions, automate routine work and make the transaction feel more predictable for everyone involved.

Forward-looking statements
This press release includes forward-looking statements about future housing market conditions, mortgage rates, rental trends 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.

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 the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, dedicated real estate professionals, and easier buying, selling, financing, and renting experiences.

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

What does Zillow forecast for U.S. home price growth in 2026 for Z?

Zillow forecasts U.S. home values +1.2% in 2026.

How many existing home sales does Zillow project for 2026 for Z?

Zillow projects 4.26 million existing home sales in 2026, a 4.3% increase over 2025.

Will mortgage rates fall below 6% in 2026 according to Zillow (Z)?

Zillow expects mortgage rates to remain above 6% in 2026.

What does Zillow predict for 2026 multifamily rent growth (Z)?

Zillow forecasts multifamily rents to rise just 0.3% in 2026.

How will single-family construction starts change in 2026 per Zillow (Z)?

Single-family starts are 5% below last year's pace and may drop another 2% in 2026.

How many major markets does Zillow expect to have annual price declines in 2026 (Z)?

Zillow forecasts declines in 12 major markets in 2026, down from 24 as of October 2025.