Zillow’s latest forecast expects home values to rise slightly by 0.3% as of December 2026. Existing home sales as measured by Zillow’s sales nowcast are projected to increase 0.5% annually to 3.73 million in 2026, while Zillow’s forecast of NAR’s existing home sales measure shows an increase of 1.6% to 4.13 million.

Zillow’s projected 0.3% increase in home values represents a downward revision from last month’s forecast. Home values are expected to remain mostly flat by year’s end, as expectations for stronger inventory growth relative to sales weigh on appreciation.

Zillow expects existing home sales to reach 3.73 million in 2026, up 0.5% compared to last year. That’s down from expectations for 3.4% annual growth in last month’s forecast. Upward revisions to mortgage rate expectations, driven by persistent inflation concerns, are likely to keep borrowing costs elevated. This is expected to weigh on buyer demand and limit overall transaction activity.

In the rental market, multifamily rents are projected to increase 1% and single-family rents 2% year over year by December 2026. Rent growth remains constrained by elevated vacancy rates, continued multifamily supply deliveries and increased competition from for-sale homes shifting into the rental market. While recent data has come in slightly stronger than expected, overall conditions suggest renters will retain some negotiating power, keeping a lid on rent growth.