Zillow made waves last week after issuing a surprising revision to their housing market forecast: They now expect national home prices to decline over the next 12 months. That’s a notable shift—and it’s got a lot of investors asking questions. Is Zillow overreacting? Are other experts on the same page? And more importantly, if a buyer’s market really is forming, is that actually bad news for real estate investors? Let’s break it all down.
From Modest Growth to a Predicted Decline
If you’ve been following Zillow’s monthly forecasts, you’ve probably noticed a steady trend downward. Back in January, they were predicting a modest 3% increase in home prices through early 2025. By February, that number dropped to 1.1%. In March, just 0.8%. And now? Zillow’s latest model is calling for a -1.9% price decline between March 2025 and March 2026. Now, to be clear, this isn’t a doomsday prediction. A 2% drop in home prices is a correction, not a crash. But it is significant, especially coming from a company that’s been relatively optimistic in the past.