Zillow's Latest Housing Forecast: A National Plateau, But Wild Swings Regionally

Well, folks, if you've been wondering what's next for the housing market, Zillow just dropped its latest crystal ball insights, and it's quite the update. After what feels like an eternity of trying to predict the unpredictable, their revised 12-month forecast from June 2026 to June 2027 now projects a national U.S. home price change of—wait for it—a perfectly flat 0.0%. Yes, you read that right: essentially no movement on average across the country.

Now, this isn't entirely out of the blue. Just last month, Zillow was eyeing a slight dip, around -0.2%, so this revision actually nudges things slightly upward to a complete standstill. It certainly reinforces their view of a "soft national housing market" throughout 2026. What’s interesting, and perhaps a small silver lining for some, is that wage growth currently sits at a healthy +3.6% year-over-year. This means, thankfully, that incomes are outpacing any home price appreciation (or lack thereof), which could offer a smidgen of relief for aspiring homeowners.

But here’s the kicker, and it’s a big one: a national average of zero growth doesn't tell the whole story, not by a long shot. Beneath that calm surface, the housing market is actually a bubbling cauldron of regional variations. Zillow’s deep dive into 400 individual markets reveals a patchwork quilt of expected surges and noticeable declines, painting a truly localized picture for the year ahead.

So, where are homes expected to gain some steam? Surprisingly, some areas in the Midwest and Northeast are leading the charge. Places like Rockford, Illinois, are looking at a robust +4.3% increase, while Syracuse, New York, isn't far behind with a projected +3.6%. Atlantic City, New Jersey, is also on the upswing, anticipating a +3.5% climb. Even big cities like Chicago are expected to see a modest gain of about +0.9%, and Rochester and Hartford could both enjoy a respectable +2.7% boost.

On the flip side, some familiar hotspots from the pandemic boom might be facing a bit of a reality check. Austin, Texas, for example, is unfortunately forecast to see a significant drop of -6.4%—ouch. It's tied with Houma, Louisiana, for the steepest predicted decline. Not far behind are Lake Charles, Louisiana, at -5.2%, and even New Orleans, which Zillow expects to fall by -4.9%. The Sun Belt, particularly Southwest Florida, is emerging as what many are calling the "epicenter of housing market softness" right now. We're talking places like Cape Coral, which saw a -5.0% dip over the last year, and Punta Gorda, down -6.2%.

Other areas feeling the pinch include Phoenix, with a forecast -2.2% decline, and even Los Angeles is expected to see a slight contraction of -0.6%. Looking back at the past year (June 2025 to June 2026), Seattle also experienced a -1.7% dip, and Austin was already down -5.2%.

It’s not just about the numbers, though; sometimes, a little expert insight helps color the picture. Lance Lambert, the co-founder of ResiClub and the author of the original piece, offers some interesting counterpoints to Zillow's broad strokes. He suggests that Zillow might be "too short-term bearish" on the New Orleans market, noting some signs of mild tightening that could defy the negative forecast. Similarly, he feels Zillow could be overly pessimistic about certain pockets of the Bay Area, especially San Francisco proper, perhaps due to the ongoing AI boom creating localized demand, even as Oakland continues to struggle.

Ultimately, what Zillow's revised forecast truly highlights is the sheer complexity and hyper-local nature of today's housing market. The national picture might look flat, but the reality on the ground, street by street, and city by city, is anything but uniform. For buyers and sellers alike, it means paying close attention to the specific dynamics of your local area, because a one-size-fits-all approach just won't cut it anymore.