Only two months into 2025, Zillow has significantly changed its original housing market prediction. With rising inventory, suppressed buyer demand from high mortgage rates, and sluggish market sentiment, Zillow’s home price forecast has been downgraded. Why the change, and what data is leading Zillow to project little or no home price growth this year? Orphe Divounguy, Senior Economist at Zillow, is on to share.

With a downgraded forecast, the question becomes: is the housing market leveling off, or could we be in store for home price dips? How will rent prices be affected with the massive wave of multifamily construction finally starting to taper off? With less supply coming online, will these units get absorbed, resulting in higher rents for single-family homes?

Have we finally reached the supply-demand equilibrium, putting the housing market on pause? What’s the one thing that could reignite buyer demand and lead to home price appreciation? Or, is this the new normal, and with little interest rate relief in sight, are we headed for years of a stagnant housing market? We’re getting Orphe’s expert take!

In This Episode We Cover

Zillow’s new February 2025 housing market forecast (and the sizable home price forecast downgrade)

Why home prices are stagnating, and the one crucial factor causing this

Mortgage rate predictions and whether we’ll see some real rate relief this year

Single-family and multifamily rent price predictions for 2025 (which will see the most growth?)

What should investors do: sit on the sidelines or capitalize on current conditions?

And So Much More!

Links from the Show

Join the Future of Real Estate Investing with Fundrise

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Dave's BiggerPockets Profile

BiggerPockets Real Estate 1083 - Feb 2025 Housing Market Update: Are Our Predictions Already Wrong?

Zillow Home Value and Home Sales Forecast (February 2025)

Grab Dave’s Book, “Real Estate by the Numbers”

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-299

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Weaker Home Prices Ahead | Zillow Downgrades 2025 Home Price Forecast 31:51 Share

On The Market

Shownotes Transcript

Weaker Home Prices Ahead | Zillow Downgrades 2025 Home Price Forecast