Key takeaways

• Home values expected to decline through 2025
• Inventory recovery continues toward pre-pandemic norms
• Rent growth slows for both single-family and multifamily units

Zillow’s latest forecast calls for home values to tick down by the end of the year, and for sales to rise slightly above 2024. Inventory is expected to continue to rise, reducing the current 20% deficit compared to pre-pandemic norms. 

Typical home values are expected to drift down slightly in the months ahead, ending 2025 2% below where they started the year. That’s a larger decline than last month’s forecast. 

New listings continue to outpace sales, which has brought total inventory up considerably — by about 17% — over last year. Inventory is expected to continue to grow across nearly all metro areas: Inventory is forecast to approach pre-pandemic levels by the end of the year. 

Existing home sales are in line to reach 4.16 million by the end 2025, a slight 2.5% improvement over last year. The forecast is largely unchanged from last month. 

Mirroring the for-sale market, rent growth is also softening for both single-family rentals and multifamily apartments. Rising inventory in the for-sale market is helping to rebalance the rental market as would-be buyers gain negotiating power, reducing pressure on rents.

Rent growth is expected to remain muted going forward. The Zillow Observed Rent Index Forecast (ZORF) for single-family rents is now projected to rise 2.75 percent in 2025, down from 4.5 percent in 2024. Multifamily ZORF is forecast at 1.3 percent, down from 2.4 percent in 2024. These represent 5 and 30 basis point downward revisions from last month, respectively.