Zillow believes they are about to be. In its most recent home price forecast update, Zillow anticipates a 6.5% increase in U.S. home prices from July 2023 to July 2024, marking a slight upward revision from their previous estimate of 6.3% made last month. To provide some context, historical data from Case-Shiller reveals that U.S. home prices have typically seen an average annual increase of 5.5% since 1975.
Zillow’s team of economists expects this national trend, with a 6.5% rise, to persist over the next 12 months. However, their forecast model suggests that in this period, 120 out of the nation’s 400 largest housing markets will experience even more significant increases, potentially exceeding 7.0%. It’s worth noting that these high-growth markets are spread across various regions of the country, with no single overarching factor driving their growth.
While Zillow holds the view that U.S. home prices have reached a bottom—a perspective shared by economists at CoreLogic and the AEI Housing Center—there are dissenting opinions within the industry. Firms like Moody’s Analytics and Morgan Stanley maintain that U.S. home prices may have some further decline ahead, a correction that could materialize between now and the conclusion of 2024.