Zillow Predicts Housing Market Will Warm in 2026

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Zillow, Seattle, released a new forecast, predicting 2026 will see an increase in both home sales and values.

The firm’s economists predict home values will rise 1.2% in 2026 nationwide.

The slight bump will also mean fewer homeowners will be underwater.

On a regional basis, Zillow projects that only 12 major markets will see annual price declines; that compares with 24 markets that saw declines in 2025.

The forecast predicts 4.26 million existing home sales next year, up 4.3% from 2025.

“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.”

However, Zillow’s economists also predict mortgage rates will hold above 6%.

2026 is also shaping up to be a weak year for single-family home construction starts, likely at the lowest rate since 2019.

Rent affordability will also improve, with multifamily rents forecast to remain nearly flat. They’ll see just a 0.3% increase, Zillow predicted.

The firm also believes that renting as a lifestyle will continue to trend, with nearly three in five renters saying they plan to keep renting next year. And, 37% of renters have a kid at home, up from 33% in 2024–Zillow predicts that apartments that offer family-friendly amenities will be competitive next year.