One of the largest real estate platforms in the United States, Zillow, is bearish on the U.S. housing market.

On Wednesday, Zillow economists released their latest forecast model, predicting that from March 2025 to March 2026, U.S. home prices (as measured by the Zillow Home Value Index) will decline by 1.7%.

Just in the past few months, Zillow has repeatedly downgraded its expectations. In January this year, its one-year forecast for home price growth was an increase of 2.9%, which was revised down to a 1.1% increase in February and further adjusted to a 0.8% increase in March. By April, Zillow directly turned bearish on the housing market, forecasting a 1.7% decline in home prices over the next year.

Why has Zillow repeatedly downgraded its home price expectations?

In its March report, Zillow's economists wrote:

"The rise in listings is putting downward pressure on price growth, as more supply gives buyers more options and bargaining power."

Zillow believes that due to continued pressure on housing affordability, many potential buyers are choosing to continue renting, thereby suppressing demand for home purchases.

U.S. home prices rose more than 40% during the pandemic, compounded by the surge in mortgage rates from 3% to 6% in 2022, severely undermining housing affordability and suppressing further home price increases.

Regional differences are significant, with the Sun Belt under the most pressure

Zillow's model points out that the weakening of some markets in the southern Sun Belt region will also drag down the national average trend of home prices. Currently, Florida is the center of the softening real estate market.

Zillow's forecasts show that home price trends across the country will diverge significantly in the coming year. Among them, some markets in Louisiana and Texas may face larger declines, while some areas in the Northeast could see slight growth.

In the top 300 largest metropolitan areas across the U.S., Zillow expects the following 10 regions to have the strongest home price growth:

  • Atlantic City, New Jersey: +2.4%
  • Kingston, New York: +1.9%
  • Rochester, New York: +1.8%
  • Knoxville, Tennessee: +1.7%
  • Torrington, Connecticut: +1.6%
  • Bangor, Maine: +1.5%
  • Syracuse, New York: +1.4%
  • Woodland, New Jersey: +1.4%
  • Concord, New Hampshire: +1.3%
  • Norwich, Connecticut: +1.2%

Zillow predicts that the 10 markets with the largest declines will be:

  • Houma, Louisiana: -10.1%
  • Lake Charles, Louisiana: -8.9%
  • New Orleans, Louisiana: -7.6%
  • Lafayette, Louisiana: -7.5%
  • Shreveport, Louisiana: -7.0%
  • Alexandria, Louisiana: -7.0%
  • Beaumont, Texas: -6.6%
  • Odessa, Texas: -6.3%
  • Midland, Texas: -5.7%
  • Monroe, Louisiana: -5.5%

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Original source: https://www.toutiao.com/article/7495228222368432676/

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