Zillow's latest housing forecast signals a modest national pullback in home values by year-end, forecasting the typical U.S. home value to finish roughly 0.9% below where it started the year while existing-home sales are expected to remain near multi‑decade lows. These national trends matter to Utah buyers, sellers, and investors because the same supply-and-demand dynamics that drive prices across the country also shape outcomes in Utah's rapidly evolving markets. This analysis summarizes the national outlook, compares forecasts from several major sources, and explains practical implications and strategies for Utah markets such as Salt Lake City, Park City, St. George, and other regional hubs. For a local resource, see https://bestutahrealestate.com.
Zillow forecasts that U.S. home values will trend downward through the end of 2025, estimating a decline of about 0.9% year-over-year. Existing-home sales are projected to finish the year around 4.09 million transactions—only slightly above the recent 29‑year low set last year. Zillow also expects new listings to outpace sales, pushing inventory up compared with last year, with the increase in available homes more pronounced in the West and South.
The downward revision to home-value forecasts appears tied to shifting supply dynamics. Earlier expectations of a larger price pullback were scaled back after fewer homes entered the market than anticipated—some sellers are delisting after failing to receive acceptable offers, and overall new supply has softened in several areas. In short, lower-than-expected new listings limited the downward pressure on prices.
Zillow’s metro forecasts show meaningful regional divergence. Parts of the Midwest and Northeast continue to exhibit tight for-sale inventories that support modest price gains, while many Sun Belt and Mountain West metros with large inventory increases are forecast to see price declines. Examples from Zillow’s metro list include modest gains in places like Milwaukee and larger declines in markets such as New Orleans and Austin, while major Western metros including Phoenix, Las Vegas, Denver, and Bay Area cities show various degrees of projected price softening.
Historical context is important. During the Great Recession, prices fell substantially, but that episode was accompanied by a massive surge in inventory—months of supply climbed into the high single digits and doubled typical balanced-market levels. Today, supply is far lower: the National Association of Realtors reported roughly 4.6 months of inventory at the end of July, which is close to a balanced market and well below the extreme glut that drove the 2007–2009 price collapse. That distinction reduces the odds of a repeat of the nationwide crash seen in the Great Recession.
Forecasts differ by methodology and index. Redfin and Realtor.com have forecasted transactions near 4.1 million and projected modest price gains (Redfin ~4.0% and Realtor.com ~3.7% in their prior outlooks). Fannie Mae recently updated its projection to roughly 4.09 million existing-home sales and a home-price increase of about 2.8% based on its own Home Price Index. Differences among forecasts reflect varying definitions (median sold price vs. proprietary home-value indices) and differing assumptions about interest rates, labor-market strength, and inventory growth.
Mortgage costs remain a central determinant of housing demand. Freddie Mac’s weekly survey showed the average 30-year fixed rate near the mid‑6% range (about 6.56% in the most recent weekly reading referenced here). Rate volatility during the past year—especially the late‑year spike—helped suppress activity. If rates drift back down toward the low‑6% range by year‑end, affordability could improve enough to stimulate buyer activity. However, even with lower rates, the combination of stretched incomes and elevated price levels since 2019 will keep affordability constraints in place for many buyers.
Utah’s real estate markets are shaped by local job growth, migration patterns, and housing supply constraints. Several broad implications apply:
Strategic responses for Utah buyers and sellers include pricing homes realistically to attract offers, sellers being prepared for slightly longer marketing times in cooling segments, and buyers focusing on financing strength and local market knowledge to win competitive offers when inventory remains tight.
Key sources referenced in this analysis include Zillow’s home-value and sales forecasts, National Association of Realtors (NAR) data on median sale prices and months of supply, Freddie Mac mortgage-rate surveys, and recent forecasts from Fannie Mae, Redfin, and Realtor.com. For additional national housing statistics and policy resources, see nar.realtor and utah.gov.
National forecasts indicate a modest price pullback through year‑end, while transactions remain near historically low levels. For Utah, the most important determinants will be local inventory trends, employment and migration patterns, and interest‑rate movements. A repeat of the Great Recession’s deep national price collapse is unlikely absent an extraordinary surge in inventory and a sharp rise in unemployment. Local market monitoring and flexible strategies will help buyers, sellers, and investors navigate the year ahead.
Not necessarily. Utah markets generally operate on local supply-and-demand dynamics. A modest national decline driven by slightly higher inventory or regional softness does not automatically translate to sharp statewide price drops, especially where listings remain constrained and local employment growth is strong.
Price near comparable recent sales while factoring in local inventory trends. In balanced or cooling segments, realistic pricing and strong marketing fundamentals (staging, professional photos, flexible showing availability) help minimize days on market and improve sale outcomes.
Yes. A drop toward the low‑6% range for a 30‑year fixed rate would materially improve monthly payment affordability for many buyers and could spur greater activity, particularly among first‑time buyers and move‑up purchasers who paused when rates were higher.
Monitor local months of supply, median days on market, new‑listing trends, and rent growth in target neighborhoods. These indicators reveal whether a market favors sellers, is shifting toward balance, or is tilting toward buyers.
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