Recent home price resilience has resulted in Zillow’s latest home value forecast being revised up slightly compared to last month. The national Zillow Home Value Index (ZHVI), which rose 4.4% in the 12 months ending in February, is expected to rise 0.6% over the next 12 months.
- Zillow expects 4.3 million existing home sales in 2023, compared to 5 million sales in 2022.
- Zillow forecasts ZHVI growth of 0.5% in 2023.
- These forecasts do not reflect the recent turmoil in the banking sector and subsequent changes to monetary policy, which have introduced fresh uncertainty to the outlook for the economy and housing market. For more information on how the failure of Silicon Valley Bank and the recent monetary policy decision made by the Federal Reserve, may impact the housing market, please consult these links.
Elevated competition — largely a result of persistently low supply — in the housing market has led Zillow to revise up its outlook for home values, but revise down its expectations for home sales in 2023. The national Zillow Home Value Index, which rose 4.4% in the 12 months ending in February, is expected to flatten out to rise 0.6% over the next 12 months. This is a slight upward revision from February’s forecast, which projected growth of 0.2% in the next 12 months. A shortage of new for-sale listings is helping to buoy home prices even as elevated interest rates present affordability challenges for buyers.
Zillow expects 4.3 million existing homes to be sold in calendar year 2023 – a 14% decrease compared to 2024. This is down slightly from February’s forecast of 4.6 million sales in 2023. Weaker-than-expected performance of leading indicators of home sales, combined with a perceived increase in higher mortgage rates, drove the downward adjustment.
