Zillow Revises Home Price Forecast Upward as Housing Market Shows Resilience

Zillow’s Upward Revision Signals Housing Market Shift

Zillow economists have upgraded their 12-month home price forecast to +1.9%, marking the third consecutive monthly improvement in their projections, according to recent reports. This represents a significant turnaround from earlier in 2025 when the real estate analytics company had issued several downward revisions amid softening market conditions.

Zillow’s Upward Revision Signals Housing Market Shift
From Bearish to Bullish: The Forecast Evolution
Broader Market Context and Analysis
What the Numbers Mean for Housing Markets
Looking Ahead: Market Implications

From Bearish to Bullish: The Forecast Evolution

The forecast journey throughout 2025 reveals a notable shift in market sentiment, analysts suggest. Heading into the year, Zillow’s 12-month projection stood at +2.6% for U.S. home prices. However, as many housing markets across the country softened faster than anticipated, the company reportedly cut its outlook to -1.7% by April 2025.

Sources indicate the turning point came in recent months when Zillow stopped issuing downward revisions. In August, the company revised its 12-month outlook upward to +0.4%, followed by a September increase to +1.2%, and now the current +1.9% projection for the period between August 2025 and August 2026.

Broader Market Context and Analysis

The revised forecast comes amid what analysts describe as a complex housing landscape. While earlier in the year many markets experienced unexpected softening, recent data suggests stabilization may be taking hold. The report states that the Zillow Home Value Index serves as the measurement benchmark for these projections, covering more than 400 housing markets nationwide.

Market observers note that Zillow’s evolving forecast reflects the dynamic nature of current housing conditions. The consecutive upward revisions reportedly signal growing confidence that the market is finding equilibrium after the volatility experienced earlier in 2025.

What the Numbers Mean for Housing Markets

The upgraded forecast suggests that what economists initially perceived as sustained market weakness may have been a temporary correction. The current +1.9% projection, while more modest than the original +2.6% forecast from the beginning of 2025, indicates that analysts believe the market has stabilized and is positioned for moderate growth.

According to the analysis, this revised outlook accounts for regional variations across the country’s housing markets. While the national projection shows improvement, individual markets may experience different trajectories based on local economic conditions, inventory levels, and buyer demand.

Looking Ahead: Market Implications

The consistent upward revisions over recent months provide what market watchers describe as cautious optimism for the housing sector. The report suggests that the stabilization trend, if it continues, could signal a return to more predictable market patterns after the uncertainty earlier this year.

Economists emphasize that while the improved forecast is encouraging, the housing market remains sensitive to broader economic factors including interest rates, employment trends, and consumer confidence. The coming months will reportedly provide further evidence of whether this positive revision trend represents a lasting market recovery.

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