Reacting to Zillow’s 2026 Housing Market Predictions

Quick Overview

Dave Meyer ultimately agrees with Zillow's 2026 housing market predictions regarding home prices rising modestly (1.2%) and single-family rent increases (2.3%), but he disagrees with Zillow's projection that mortgage rates will hold above 6% and predicts they will dip slightly below 6% due to moderating inflation, which he views as the most important factor for real estate investors.

Key Points: Zillow predicts U.S. home values will rise by a modest 1.2% in 2026, following a flat year in 2025, driven by improving affordability (00:00:00-00:03:00, 01:30:00-01:32:00). Zillow forecasts fewer homeowners will be underwater on their mortgages as prices firm up, with the number of affected major markets cut in half to 12 next year (00:07:00-00:09:00, 05:21:00-05:45:00). Zillow predicts mortgage rates will hold above 6% in 2026, but Dave Meyer disagrees, guessing they will average around 6.15% (08:18:00-09:06:00, 09:37:00-10:11:00). Existing home sales are projected to climb slightly by 4.3% to 4.26 million units in 2026, driven by pent-up demand as affordability slowly improves (09:59:00-10:01:00, 12:41:00-12:52:00). Rent affordability is expected to improve nationally, with multifamily rents rising only 0.3% and single-family rents climbing 2.3% in 2026, though New York City is a notable exception (19:13:00-19:50:00). The concept of 'Kidfluence' is highlighted, noting 37% of renters now have a child under 18, influencing housing decisions toward family-friendly amenities (27:00:00-27:45:00). AI is predicted to evolve from a helpful assistant to a transaction coordinator by 2026, streamlining tasks like scheduling and negotiations (31:54:00-32:20:00).

Context: Host Dave Meyer, Head of Real Estate Investing at BiggerPockets and author of 'Start With Strategy' and 'Real Estate by the Numbers,' analyzes and reacts to Zillow's 2026 housing market predictions. The analysis covers forecasts for home prices, mortgage rates, home sales, rental markets, builder activity, and the growing influence of AI and family needs on housing trends.