# Reacting to Zillow’s 2026 Housing Market Predictions Source: https://www.youtube.com/watch?v=XudgG5GyXok Recap page: https://rapidrecap.app/video/XudgG5GyXok Generated: 2026-01-09T15:02:52.31+00:00 --- ## 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). ![Screenshot at 00:01: Zillow's 2026 Housing Market Predictions article headline displayed on screen, setting the context for the video's review.](https://ss.rapidrecap.app/screens/XudgG5GyXok/00-00-01.jpg) **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. ## Detailed Analysis Dave Meyer analyzes Zillow's 2026 housing market predictions, generally agreeing with positive trends like modest home price appreciation and improvement in renter affordability, but disagreeing on a key rate forecast. Zillow predicts home values will rise 1.2% in 2026 after being flat in 2025, leading to fewer homeowners being underwater on their mortgages (down from 24 of 50 largest markets in 2025 to just 12 in 2026). Meyer agrees with the forecast for existing home sales to climb 4.3% to 4.26 million units due to pent-up demand being released as affordability slightly improves. On rent, Zillow predicts multifamily rents rising only 0.3% and single-family rents climbing 2.3% due to delayed home purchases, which Meyer agrees will lead to relief for renters, though he notes New York City is an exception. Where Meyer disagrees is on mortgage rates, as Zillow predicts rates holding above 6%; Meyer forecasts a slight dip to around 6.15% due to moderating inflation. He also notes that the concept of 'Kidfluence' is becoming important, as 37% of renters now have children under 18 and influence housing decisions toward family-friendly amenities. Finally, Zillow predicts AI will evolve from an assistant to a transaction coordinator by 2026, streamlining processes like tour scheduling and negotiations, which Meyer believes is likely, though he remains skeptical about AI taking over core negotiation roles. ### 1. Home Price Prediction - Zillow forecasts 1.2% growth in 2026 after 2025 was roughly flat - Meyer slightly more pessimistic, expecting prices to be relatively flat (0% to -1%) (01:25:00-01:55:00, 04:00:00-04:04:00). ### 2. Fewer 'Underwater' Mortgages - Zillow forecasts the number of affected markets will be cut in half (from 24 to 12) as prices stabilize (05:16:00-05:52:00). ### 3. Mortgage Rate Prediction - Zillow predicts rates will hold above 6% - Meyer predicts rates will average slightly below 6% (around 6.15%) due to inflation moderation (08:13:00-10:11:00). ### 4. Home Sales Will RISE - Zillow projects a 4.3% increase in existing home sales to 4.26 million units in 2026, driven by improving affordability (12:38:00-12:52:00). ### 5. Worst Year for Builders? - New construction starts are predicted to be the slowest year since before the pandemic (2019), trending 5% below last year's pace (14:57:00-15:53:00). ### 6. Rent Price Prediction - Rent affordability improves; multifamily rents rise 0.3%, single-family rents climb 2.3% (19:13:00-19:50:00). ### 7. More Americans WANT to Rent - Renting is seen as a deliberate lifestyle choice for mobility and reduced maintenance; 37% of renters plan to keep renting next year (23:24:00-24:09:00). ![Screenshot at 00:01: Zillow's 2026 Housing Market Predictions article headline displayed on screen, setting the context for the video's review.](https://ss.rapidrecap.app/screens/XudgG5GyXok/00-00-01.jpg) ![Screenshot at 02:00: Title card for the episode featuring the host, Dave Meyer, and the BiggerPockets Real Estate logo.](https://ss.rapidrecap.app/screens/XudgG5GyXok/00-02-00.jpg) ![Screenshot at 05:56: Dave Meyer discusses Zillow's prediction about fewer owners being underwater on mortgages, gesturing with his hands.](https://ss.rapidrecap.app/screens/XudgG5GyXok/00-05-56.jpg) ![Screenshot at 08:17: Slide detailing Zillow's prediction that Mortgage Rates Will Hold Above 6% in 2026.](https://ss.rapidrecap.app/screens/XudgG5GyXok/00-08-17.jpg) ![Screenshot at 29:22: Slide detailing Zillow's prediction on 'Kidfluence' steering rental demand, listing specific amenity preferences.](https://ss.rapidrecap.app/screens/XudgG5GyXok/00-29-22.jpg)