Housing Market to Benefit From Improved Affordability in 2026, Zillow Says

01:16 PM EST, 12/04/2025 (MT Newswires) -- The US housing market is expected to benefit from improved affordability in 2026 amid pent-up demand, Zillow (ZG) (Z, ZG) said Thursday.

The online real estate marketplace is looking at a 4.3% increase in existing home sales in 2026 to 4.26 million units from this year's projected total.

Pent-up housing demand is expected following years of limited inventory and elevated mortgage rates, according to Zillow (ZG). Mortgage costs should ease in 2026, but rates are unlikely to fall below 6%.

"The housing market is finally settling into a healthier state, with buyers and sellers starting to return," Zillow (ZG) Chief Economist Mischa Fisher said. "Buyers are benefiting from more inventory and improved affordability, while sellers are seeing price stability and more consistent demand."

Zillow's (ZG) optimistic outlook for the housing market, which has been hit by high mortgage rates and affordability issues, mirrors upbeat projections by online real estate brokerage Redfin.

The housing market is expected to start recovering slowly from next year as improved affordability will likely drive a moderate sales growth, Redfin said Tuesday.

The 30-year fixed mortgage rate in the US was 6.19% as of Thursday, compared with 7.04% in mid-January, Freddie Mac data showed.

Zillow (ZG) is projecting a 1.2% increase in home values next year. Prices are expected to be roughly flat in 2025.

Price: 75.47, Change: -0.54, Percent Change: -0.71

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