Zillow Reduces Forecast to -1.7% Home Value Growth Through March 2026 – Reventure Reaction
April 21, 2025
Zillow, the largest online real estate company in America, is now turning bearish on the U.S. Housing Market. They recently downgraded their 2025-26 housing market forecast to -1.7% price growth over the next 12 months, their first downward forecast in years. This marks a stark reversal for the US Housing Market, as earlier this year, Zillow was forecasting +2.9% growth. However, a combination of economic uncertainty, affordability constraints, and an increase in new listings hitting the market has caused them to downgrade their forecast. In this post, Reventure will analyze Zillow’s updated forecast and provide its own price forecast comparison for buyers and investors.
Zillow Predicts Price Declines Across All Major U.S. Housing Markets
Zillow’s research team initiated the following note on April 18th, 2025:
Home values are projected to drop by 1.9% this year – a revision from the previous expectation of a 0.6% increase. The combination of rising available listings and elevated mortgage rates is signaling potential price drops by year’s end. With increased supply, buyers are gaining more options and time to decide, while sellers are cutting prices at record levels to attract bids.
This is quite the reversal of fortunes for the housing market, and one many homebuyers and investors should be paying attention to in 2025. Zillow has more data on the housing market than pretty much anyone else, and now they are turning increasingly bearish. Interestingly, their research note mentioned their forecast was -1.9% over the next 12 months; however, the forecast spreadsheet found on their data page shows -1.7%. It’s not clear why this discrepancy exists, but in either case, Zillow is forecasting between -1.7% and -1.9% price growth across the U.S. from March 2025 to March 2026.
Zillow reduced the home value growth forecast to -1.7% through March 2026. Access the above table here. [Link]
What’s even more interesting is Zillow’s updated market-by-market breakdown. They’re now predicting home prices to fall in all 30 of the largest U.S. metro areas, indicating a forecast of a broad housing market correction in 2025 and early 2026. Moreover, the steepest projected declines are expected in San Francisco (-5.2%), Minneapolis (-4.2%), Austin (-4.0%), San Antonio (-4.0%), and Denver (-4.1%), indicating a sharp reversal in formerly red-hot markets.
Reventure agrees with the direction of Zillow’s forecast, but disagrees on individual forecasts
Reventure’s 12-month home price forecast through March 2026 came in at -0.4%, which is more optimistic than Zillow’s, but in general agreement with home prices declining gradually throughout the year. However, important differences between Reventure’s and Zillow’s forecasts appear when analyzing market-specific dynamics.
In Reventure’s 12-month price forecast, only 18 of the top 30 markets are expected to see price drops. Reventure’s latest forecast shows the sharpest projected home price declines in Denver (-8.6%), Orlando (-6.3%), Austin (-6.3%), and Dallas (-5.8%) over the next year. These Sunbelt and Mountain West markets are experiencing growing inventory, weakened affordability, and slowing demand. In contrast, Zillow projects more muted declines in these same markets. For instance, it projects -4.1% declines in Denver, -1.9% in Orlando, -4.0% in Austin, and -2.9% in Dallas. We believe Zillow’s forecast likely underestimates the severity of the market corrections unfolding in these metros.
Reventure projects a far more moderate -0.4% dip in home value growth. Access the above table here. [Link]
On the other hand, Reventure expects home prices to continue rising in Northeast and Midwest markets like New York, Chicago, Philadelphia, Detroit, Baltimore, and Pittsburgh. The reason Reventure expects prices to keep rising in these markets is due to a historic inventory shortage continuing to take place, as supply simply has not kept pace with demand in these areas. However, Zillow maintains a more bearish outlook on key Northeast metros. Zillow expects New York to drop by 2.4% and Boston by 1.7%, while Reventure forecasts +4.8% growth for New York and +3.8% for Boston.
Final Thoughts
Both Reventure and Zillow agree on the broader direction of the housing market, however, some key differences in our forecasts show up at the market level. Reventure believes some markets will correct significantly in 2025 (Denver, Austin, Dallas) while other markets will continue growing (New York, Chicago). Our forecasts consider inventory levels, mortgage rate trends, price cuts, and home value growth to provide a clear picture of the market to homebuyers and investors. If you want accurate housing market metrics for your state, metro, county, or ZIP code, sign up for a Reventure App premium subscription. It costs only $39 per month and provides reliable data you can trust.
FAQs about Zillow Reduces Forecast
Q1: Why Did Zillow Lower Its Home Price Forecast to -1.7%?
Zillow adjusted its outlook due to persistent high mortgage rates, falling affordability, and weakening buyer demand. These macroeconomic factors are prompting expectations of a nationwide housing correction through March 2026.
Q2: How Does Reventure’s Housing Forecast Differ from Zillow’s?
Reventure projects only a -0.4% national dip and expects declines in just 18 of the top 30 metros. Unlike Zillow, we anticipate growth in supply-constrained cities like New York, Boston, and Philadelphia.
Q3: Which Markets are Expected to See the Biggest Home Price Declines?
Reventure forecasts the sharpest drops in Denver, Orlando, Austin, and Dallas, driven by oversupply and affordability breakdowns. These markets face deeper corrections than Zillow currently predicts.
