Why Zillow is Predicting 11.6% US Housing Market Growth Over the Next 12 Months

When it comes to predicting the housing market, few could claim they understand what’s happening better than Zillow, one of the most popular real estate listings services in the US.

If you’re hoping to buy a house the good news is that Zillow has downgraded its predictions from April 2022, but the bad news is that it’s still expecting double-digit price growth over the next year. Let’s take a closer look.

Zillow’s Predictions

Zillow carries out a market research report every month, which focuses on predicting trends within the real estate market over the next year. Its latest piece projects 11.6% growth in home prices between May 2022 and April 2023.

While that might sound like a lot, it’s a lot lower than Zillow’s previous report, which forecasted a massive 14.9% growth over the next year. Plus, both projections are significantly below the price growth of almost 20% we experienced in 2021.

According to Zillow’s Home Value Index — which has analyzed annual price growth in properties since 2000 — an 11.6% growth rate has only been observed since 2020 and during a similar run in 2005.



Investing in Real Estate or Buying a New Home?

Learn About Emerging Trends In: Mortgage rates  Buyer demand Home values Real estate investor trends

Why Price Growth is Slowing

A major factor in slowing price growth is the Federal funds rate increase, which rose in May 2022 to 0.75%.

This has made it more expensive to get a mortgage, contributing to lower demand for housing — especially when combined with increasing costs of living due to inflation and wages that are failing to keep up.

Swipe up now to read the full post!