New Zillow Forecast: 10 Predictions for the 2026 Housing Market - BiggerPockets Real Estate Recap
Podcast: BiggerPockets Real Estate
Published: 2026-01-09
Duration: 40 minutes
Guests: Dave Meyer
Summary
Zillow's 2026 housing market predictions include modest home value growth, stable but high mortgage rates, and a rise in lifestyle renting. Dave Meyer critiques these predictions, offering a contrasting view on price trends and the influence of 'kidfluence.'
What Happened
Zillow forecasts a 1.2% increase in U.S. home values in 2026, following a flat 2025, but Dave Meyer expects home prices to fall slightly by 1%. While Zillow is optimistic about an increase in sales volume by 4%, Meyer expresses skepticism about the potential for a significant rebound in housing demand.
Zillow's prediction that mortgage rates will remain above 6% in 2026 aligns with Meyer's expectations, who suggests they might average around 6.1%. Inventory growth remains stalled, with new listings not showing signs of significant increase year over year.
Interestingly, Zillow projects a rise of 'lifestyle renters,' with many opting not to buy homes even if mortgage rates drop. This trend highlights a preference for mobility and low maintenance, which could benefit real estate investors targeting long-term tenants.
Zillow introduces the concept of 'kidfluence,' suggesting children will significantly impact rental decisions. However, Meyer finds this prediction laughable and questions its viability in steering market trends.
On the construction front, Zillow foresees a weak year for new builds, which could favor buyers due to potentially lower prices compared to existing homes. The median price of newly built homes is currently cheaper, which might continue as a trend beneficial for buyers.
Zillow also predicts that AI will advance from being just an assistant to a transaction coordinator in real estate by 2026, though Meyer remains skeptical about AI's transformative potential in this timeframe.
Key Insights
- Zillow forecasts a 1.2% increase in U.S. home values by 2026, contrasting with expectations of a slight decline in home prices by 1% from other analysts.
- Mortgage rates are predicted to remain above 6% in 2026, with an average rate of around 6.1%, according to both Zillow and other market expectations.
- A trend of 'lifestyle renters' is anticipated to rise, where individuals choose renting over buying for increased mobility and reduced maintenance, presenting opportunities for real estate investors focusing on long-term rentals.
- AI is expected to evolve from an assistant role to a transaction coordinator in real estate by 2026, although there is skepticism about its transformative impact within this timeframe.