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This week, Zillow economists announced that they expect U.S. home prices, as measured by the Zillow Home Value Index, to rise 1.1% between January 2025 and January 2026. Thats a downward revision from their previous 12-month forecast, which had projected a 2.9% increase in U.S. home prices.
Zillows latest forecast anticipates home value growth in 2025 to be weaker than previously expected, wrote Zillow economists on Wednesday. New listings were higher than expected out of the gate this year, and inventory expectations that were revised higher have put downward pressure on Zillows forecast for home value growth.
Not only do Zillow economists predict weak national home price growth this year, but theyre also predicting that U.S. existing home sales remain unchanged from 2023 and 2024 at 4.1 millionwhich is well below the 5.3 million U.S. existing home sales in pre-pandemic 2019.
Zillow economists added that: As elevated mortgage rates dampen demand for home purchases, many potential buyers are staying renters for longer. Zillow forecasts a 3.7% increase in single-family rents for 2025, while multifamily rents are projected to rise by 3.1%. With apartment construction slowing, the growth rates for single-family and multifamily rents are expected to converge more closely than in recent years.
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