Zillow’s forecast of the nation’s typical home value was revised downward this month due to an uncharacteristic month-over-month dip in September and mortgage rates climbing ever higher.
Zillow forecasts the national Zillow Home Value Index (ZHVI) to grow 3.3% in 2023, down from an expectation for 4.3% growth last month. Zillow’s forecast for national ZHVI growth over the next 12 months (from September 2023 through September 2024) is 2.1%, down from last month’s prediction of a 4.9% rise from August 2023 through August 2024.
Zillow’s projection for existing home sales in 2023 remained steady at 4.1 million. That would represent an 18% decline from 2022.
For-sale inventory is expected to remain near today’s historically low level, limiting potential sales and keeping upward pressure on home values. Elevated mortgage rates are weighing on new listings with “rate-locked” homeowners largely opting to hold onto the relatively low monthly payment associated with their current home. While many home shoppers are priced out or limited in what they can afford, there are enough active buyers to keep competitive pressure on for the few homes available for sale.