Zillow’s Revised Housing Forecast Signals Market Resilience Amid Economic Shifts

Zillow’s Evolving Housing Market Projections

In a significant shift from earlier predictions, Zillow has upgraded its 12-month national home price forecast to +1.9%, marking the third consecutive upward revision since April 2025. This latest adjustment reflects a notable stabilization in housing markets that had previously shown concerning softening trends. The revised outlook suggests that the U.S. housing market may be finding its footing after a period of uncertainty and downward pressure on prices.

Zillow’s Evolving Housing Market Projections
The Forecast Trajectory: From Bearish to Cautiously Optimistic
Regional Market Dynamics Driving the Recovery
Economic Factors Influencing the Revised Outlook
Implications for Homebuyers and Industry Professionals
Looking Beyond the 12-Month Horizon

The Forecast Trajectory: From Bearish to Cautiously Optimistic

Zillow’s forecasting journey through 2025 reveals a dramatic narrative of market recalibration. Beginning the year with a relatively optimistic +2.6% projection, the real estate analytics firm quickly encountered market realities that forced multiple downward revisions. By April 2025, the forecast had turned negative at -1.7%, reflecting widespread concerns about housing affordability, inventory challenges, and economic headwinds.

The turning point emerged in August 2025, when Zillow revised its outlook upward to +0.4%, followed by a September adjustment to +1.2%. This progressive improvement culminated in the current +1.9% forecast, indicating that market fundamentals may be strengthening more rapidly than anticipated.

Regional Market Dynamics Driving the Recovery

While the national forecast provides a broad overview, Zillow’s analysis of more than 400 individual housing markets reveals significant regional variations. Markets that experienced the most substantial price corrections earlier in the cycle are now showing the strongest signs of stabilization. The recovery appears to be led by regions with strong employment growth, balanced inventory levels, and continued demographic demand.

Notable regional patterns include:, according to market developments

Sun Belt markets demonstrating resilience despite earlier concerns about overvaluation
Midwestern housing markets maintaining steady, if modest, growth trajectories
Coastal markets showing varied performance based on local economic conditions
Markets with strong tech employment recovering more quickly than manufacturing-dependent regions

Economic Factors Influencing the Revised Outlook

Several macroeconomic developments have contributed to Zillow’s more optimistic stance. Mortgage rate stability, improved consumer confidence, and stronger-than-expected job growth have all played roles in supporting housing demand. Additionally, inventory constraints that have characterized the post-pandemic housing market continue to provide a floor under prices, even as new construction gradually increases supply., as additional insights

The Federal Reserve’s monetary policy decisions throughout 2025 have been particularly influential. As inflation concerns have moderated, the central bank’s measured approach to interest rates has helped create a more predictable environment for both buyers and sellers.

Implications for Homebuyers and Industry Professionals

For prospective homebuyers, Zillow’s revised forecast suggests that the window for purchasing at potentially discounted prices may be narrowing. However, the modest nature of the projected growth indicates that markets are unlikely to return to the double-digit appreciation rates seen in recent years.

Real estate professionals and industry analysts should note that while the overall trend is positive, market conditions remain highly localized. Understanding specific market dynamics, inventory levels, and local economic factors will be crucial for accurate pricing and investment decisions.

Looking Beyond the 12-Month Horizon

While Zillow’s current focus remains on the immediate 12-month period, the firm’s evolving forecasts provide valuable insights into longer-term market trends. The pattern of revisions suggests that housing market analysts are continuously recalibrating their models to account for rapidly changing economic conditions and consumer behavior patterns.

As the housing market continues to navigate post-pandemic normalization, Zillow’s forecasting methodology and adjustment patterns offer a case study in how real estate analytics adapt to unexpected market movements. The company’s willingness to revise projections multiple times throughout the year demonstrates the complexity of predicting housing market performance in an era of economic uncertainty.

For those seeking broader context on housing market predictions, comparative analysis of multiple forecasting models provides additional perspective on the range of expert opinions shaping market expectations.