Where home prices are headed, according to Zillow’s latest forecast

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This week, Zillow economists announced that they expect US home prices, as measured by the Zillow Home Value Index, to increase +2.9% between October 2024 and October 2025.

“This is an upward revision to our outlook from last month. Opposing forces are working to keep home values ​​rising, but only at a modest pace. Inventory remains very low by historical standards, which coupled with expectations of falling mortgage rates and modest improvements in other leading indicators of home sales are helping to boost home values.At the same time, modest increases in new listings and persistently high mortgage rates are combining to limit price growth,” wrote Zillow economists.

While Zillow economists forecast a 2.9% increase in national home prices next year, they expect only “a gradual increase in existing home sales in the coming year, with an estimated 4.3 million sales in 2025, a slight increase from the 4.1 million transactions recorded in 2023 and 4 million expected for 2024.”

Click here to see an interactive version of the map below

Among the 400 largest US housing markets, Zillow expects the strongest home price growth between October 2024 and October 2025 to occur in…

  1. Atlantic City, NJ —> +6.5%

  2. Kingston, NY —> +6.1%

  3. Augusta, ME —> +6.1%

  4. Pottsville, PA —> +5.9%

  5. Knoxville, TN —> +5.8%

  6. Vineland, NJ —> +5.7%

  7. Lewiston, ME —> +5.7%

  8. Concord, NH —> +5.6%

  9. Bangor, ME —> +5.3%

  10. Muncie, IN —> +5.3%

Among the 400 largest US housing markets, Zillow expects the weakest home price growth between October 2024 and October 2025 to occur in…

  1. Lake Charles, LA —> -7.8%

  2. Houma, LA —> -5.8%

  3. Lafayette, LA —> -4.0%

  4. Johnstown, PA —> -3.9%

  5. New Orleans, LA —> -3.8%

  6. Eureka, CA —> -3.4%

  7. Beaumont, TX —> -3.1%

  8. Odessa, TX —> -3.0%

  9. Shreveport, LA —> -2.9%

  10. Hammond, LA —> -2.9%

A quick take: I’m skeptical of Zillow’s home price forecasts for Florida, where active listings/months of supply are up significantly this year, which could indicate weak prices ahead.

Lennar – which operates in 26 states – delivered 73,087 homes in fiscal 2023.

Rausch Coleman Homes – which is active in 16 markets in Alabama, Arkansas, Florida, Kansas, Missouri, Oklahoma and Texas – expects to complete 5,000 homes this calendar year.

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The survey results will be published later this month in ResiClub – and in other mainstream media publications.