Where Home Prices Are Headed, According to Zillow's Latest Forecast
As we end 2024, many potential homebuyers, sellers, and investors are curious about the direction of home prices. According to Zillow’s latest forecast, U.S. home prices are expected to rise by 2.9% over the next 12 months, from October 2024 to October 2025. This forecast offers key insights into how the housing market will evolve and provides important information for anyone involved in real estate.
What Zillow’s Forecast Means for Homebuyers
For homebuyers, the projected 2.9% increase in home prices means that while the rapid acceleration in home values of the past few years may slow down, prices will still continue to climb at a moderate pace. This suggests that waiting for a significant dip in home prices may not be the best strategy if you're planning to buy in the next year.
However, the slower pace of growth offers an opportunity for homebuyers to enter the market without the extreme competition and bidding wars that characterized the housing boom. Buyers may have more time to consider their options, and with lower price increases, purchasing power may stabilize in many areas.
If you're considering buying, it may be wise to act sooner rather than later to lock in a home before prices rise further.
Why Are Home Prices Expected to Rise?
Several factors contribute to this moderate increase in home prices:
Continued Low Inventory: The supply of homes on the market remains constrained, which continues to put upward pressure on prices. While new construction is picking up in some areas, housing inventory still lags behind demand in many regions.
Stable Demand: Despite higher mortgage rates, demand for homes remains strong, especially in desirable areas and for single-family homes. Many buyers are still looking to take advantage of relatively stable prices and are willing to move forward with purchases.
Economic Conditions: The overall economic environment—while slower—remains favorable for real estate, with steady job growth and wage increases helping to support homebuyer demand.
Looking Ahead: A Steady, Moderate Growth in Home Prices
Zillow's forecast of a 2.9% increase in U.S. home prices over the next year suggests that the housing market will continue to grow, albeit at a more stable pace. For homebuyers, sellers, and investors, this presents a unique opportunity to make informed decisions and act strategically within a more predictable market.
Whether you’re looking to purchase your first home, sell your property, or invest in real estate, understanding where home prices are headed will help you make the right moves in the market.
Need Help Navigating the Market?
If you're looking to buy, sell, or invest in real estate, the Justiz League Real Estate Team is here to guide you through every step of the process. Our team offers expert insights and personalized advice to help you make informed decisions in the evolving market.
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