Zillow Home Value and Home Sales Forecast (December 2023)

Zillow’s home value forecast for home values over 2024 was revised upward this month. Where the previous forecast called for home values to remain flat over the coming 12 months, this edition predicts home values will rise 3.7% over the 2024 calendar year, a pace of appreciation closer to long-term norms. 

The revision was driven by external factors – such as the decline in mortgage rates towards the end of the year and an improved inflation outlook from the Federal Reserve – and other updates pertaining to our outlook. 

In December, the average U.S. 30-year fixed mortgage rate dropped 63 basis points from November to a monthly average of 6.8 percent. While the Federal Reserve’s Federal Open Market Committee (FOMC) did not lower the federal funds rate in December, it signaled that it expects to lower it by 75 basis points in 2024 – news that helped prompt the downward shift in rates. Mortgage rates have since reversed course and risen in recent weeks. These changes will likely be reflected in our next forecast update

Zillow’s forecast of existing home sales now calls for 4.09 million existing homes to sell in 2024 – about as many that sold in 2023.