Z
illow's forecast for home values has taken a turn, with the predicted difference from March 2025 to March 2026 now showing a decline of 1.7%. This downward revision comes as new listings surge while sales fail to keep pace, leading to an anticipated drop in home prices over the next year – a rare occurrence since mid-2012.

    The forecast is based on current market trends and economic conditions. With stock portfolios dipping and affordability challenges persisting, potential buyers may adopt a "wait and see" approach, putting downward pressure on home prices, according to Kara Ng, senior economist at Zillow.

    In March, over 375,000 homes entered the market, while only 265,000 went pending, resulting in a significant increase in inventory. Sellers have also begun slashing prices, with 23.5% of listings on Zillow seeing price cuts – the highest March percentage since at least 2018.

    Across the country, many metros are experiencing year-over-year home value drops. Sixteen of the top 50 metros studied by Zillow have seen declines, with Austin, Texas, and Tampa, Florida, leading the way with drops of 4.6% and 4.5%, respectively. However, some areas continue to see price increases, including San Jose, California, which led the way with a 5.5% gain. Despite the recent slowdown, it remains a seller's market overall.