Zillow Home Value Forecast: October 2023
Zillow’s national home value forecast was revised downward this month due to persistently high mortgage rates as well as signs that the monthslong housing inventory crunch may finally be easing.
Zillow expects the national, non-seasonally-adjusted Zillow Home Value Index (ZHVI) to grow 3% in 2023, down from an expectation for 3.3% growth in last month’s forecast. Zillow’s forecast for national ZHVI growth over the next 12 months (from November 2023 through October 2024) is fairly flat at -0.2%, down from last month’s prediction of a 2.1% rise from October 2023 through September 2024.
Zillow’s projection for existing home sales in 2023 remained steady at 4.1 million. That would represent an 18% decline from 2022.
New listings, despite remaining historically low, have at least trended nearer to pre-pandemic norms the past two months. This may be an early sign that the effects of rate lock are easing as homeowners accept that higher rates are sticking around. More homes on the market means less competition for each listing, one reason that Zillow’s home value forecast was revised downward.
Another reason for Zillow’s downward home value forecast revision is mortgage rates that have remained elevated. However, recent inflation data has shown promising signs for the future of mortgage rates. If that downward pressure continues, expect higher homebuying demand.
