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Heading into the yr, Zillow economists forecasted that U.S. house costs have been prone to rise 2.6% in 2025.
Nevertheless, this yr, the housing market—particularly within the Solar Belt—was softer than anticipated and Zillow has made a number of downgrades to its forecast for nationwide house costs.
This week, newly launched knowledge from Zillow reveals that U.S. house costs have decelerated to a year-over-year improve of simply 0.4%. Zillow economists now count on U.S. house costs to say no by 0.7% between Could 2025 and Could 2026.
“With stock up almost 20% over the earlier yr, consumers had extra choices in Could than at any time since July 2020. Regardless of increased gross sales, sellers nonetheless outnumber consumers,” wrote Zillow economists. “This offers consumers extra time to resolve and extra energy in negotiations. Zillow’s market warmth index reveals a balanced market nationwide, one which’s much more buyer-friendly than lately. Competitors amongst consumers declined to the bottom stage seen in Could in Zillow data, reaching again by way of 2018.”
Not solely do Zillow economists predict comfortable nationwide house worth progress this yr, however they’re additionally predicting that the housing market will solely see 4.1 million U.S. current house gross sales in 2025. That will mark the third-straight yr of suppressed current house gross sales. For comparability, in pre-pandemic 2019, there have been 5.3 million current house gross sales within the U.S.
Zillow economists added: “Residence values have fallen in 22 of the 50 largest metro areas over the previous yr, and sellers reduce costs on virtually 26% of listings nationwide—one other Could excessive in Zillow data. Properties that promote sometimes accomplish that in 17 days, about 4 greater than final yr and solely two days fewer than pre-pandemic averages.”
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Among the many 300 largest U.S. housing markets, Zillow expects the strongest house worth appreciation between Could 2025 and Could 2026 to happen in these 10 areas:
- Atlantic Metropolis, New Jersey → 3.4%
- Kingston, New York → 2.7%
- Knoxville, Tennessee → 2.6%
- Pottsville, Pennsylvania → 2.5%
- Torrington, Connecticut → 2.4%
- Rochester, New York → 2.2%
- Syracuse, New York → 2.1%
- Fayetteville, Arkansas → 2.1%
- Rockford, Illinois → 2.1%
- Yuma, Arizona → 2.0%
Among the many 300 largest U.S. housing markets, Zillow expects the weakest house worth appreciation between Could 2025 and Could 2026 to happen in these 10 areas:
- Houma, Louisiana → -9.4%
- Lake Charles, Louisiana → -8.9%
- New Orleans → -7.2%
- Alexandria, Louisiana → -6.7%
- Lafayette, Louisiana → -6.6%
- Shreveport, Louisiana → -6.4%
- Beaumont, Texas → -6.2%
- San Francisco → -5.5%
- Midland, Texas → -5.3%
- Odessa, Texas → -5.3%
Whereas Zillow expects house costs throughout most of Florida to be flat over the approaching yr, ResiClub stays skeptical. In spite of everything, Florida has skilled a major improve in energetic stock and months of provide over the previous yr, which may sign potential pricing weak spot. Certainly, prices of single-family homes and condos are currently declining in most Florida housing markets.
