The housing market is expected to rebound modestly in 2026, according to Zillow’s latest forecast. Both home values and existing home sales are projected to increase, though recovery is expected to remain gradual.
Home values are forecast to rise 1.9% in 2026. As inventory continues to rebuild and mortgage rates ease only gradually, price growth is expected to remain modest. The path to better affordability is expected to be gradual, shaped by rising incomes, restrained price growth and easing interest rates. While not a quick fix, it would help buyers regain purchasing power while homeowners continue to build wealth.
Existing home sales were essentially flat from 2024 to 2025, and while improvement is expected this year, the recovery is likely to be measured. Sales are projected to reach about 4.2 million, representing a 3.9% annual increase. Affordability constraints, a softening labor market and only gradual mortgage rate relief continue to weigh on activity. As a result, sales are expected to remain well below historical norms.
Rent growth is expected to remain weak across both single-family and multifamily markets. Single-family rents are projected to rise 1.6% year over year, while multifamily rents are expected to increase just 0.2%. Elevated vacancies, ongoing multifamily completions and added competition from single-family home listings flipping from the for-sale market to the rental market continue to limit rent growth, pushing property managers to rely more on concessions or amenities to maintain occupancy.
Mortgage rates are expected to ease gradually into 2026, providing modest support to the housing market. Rates are forecast to move into the low-6% range by year-end, helping improve affordability and release some pent-up for-sale demand.
| Annual forecast (2026) | |
| Typical home value growth (ZHVI) | +1.9% |
| Existing home sales | 4.2M (+3.9% YoY) |
| Typical single-family rent growth (ZORI) | +1.6% |
| Typical multifamily rent growth (ZORI) | +0.2% |