Podcast Summary: New Zillow Forecast — 10 Predictions for the 2026 Housing Market

Podcast: BiggerPockets Real Estate Podcast
Host: Dave Meyer
Airdate: January 9, 2026

Episode Overview

In this episode, Dave Meyer, Head of Real Estate at BiggerPockets and experienced data analyst, unpacks and critiques Zillow’s freshly released 2026 housing market predictions. Dave compares Zillow’s forecast point-by-point with his own views, providing insight for investors, homeowners, and anyone eyeing the real estate market. The episode covers home prices, mortgage rates, home sales, rental trends, and more. Dave’s analysis is candid, data-driven, and colored with the practical perspective of an active investor.

Key Discussion Points & Insights

1. Home Values Will Rise Modestly

Zillow's Prediction:
US home values to grow 1.2% in 2026, following a flat 2025.
Dave’s Take [02:50]:

• Mildly disagrees, leaning towards a slight decline (possibly -1%) but notes "for all intents and purposes, I think Zillow and I are saying pretty similar things here."
• Emphasizes that, with the market more balanced than during the pandemic, "things are pretty much flat."
• Quote: "I think the important takeaway here is that both Zillow and I...are all basically saying they don't expect home prices to move that much on a national basis." [04:37]

2. Fewer Owners Will Be Underwater as Prices Firm Up

Zillow's Prediction:
Rising values means fewer underwater mortgages.
Dave’s Take [07:30]:

• Disagrees, predicting that if prices drop even slightly, underwater mortgages will marginally increase.
• Explains "mortgages being underwater doesn't worry me on its own" unless paired with forced selling.
• Quote: "If price prices go down even 1%, I think by nature that means that you're going to have more mortgages underwater." [07:05]

3. Mortgage Rates Will Hold Above 6%

Zillow's Prediction:
Rates won’t dip below 6% in 2026.
Dave’s Take [10:11]:

• Agrees, estimating 2026 rates to average just over 6%.
• Main barrier: Inflation — “Inflation is the number one barrier for mortgage rates coming down.”
• Quote: “I think there might be a point in 2025 where we get into the fives... But if you’re to ask me for the average of mortgage rates for all of 2026, I believe it will be above 6%." [10:33]

4. Existing Home Sales Will Climb Slightly

Zillow's Prediction:
Sales volume will increase by 4.3% to 4.26 million.
Dave’s Take [16:41]:

• Agrees: "I do think demand is not going to fall off a cliff."
• Notes the market is still well below normal ("more than 20% down from normal") and sees Zillow's forecast as a "baby step towards more housing activity."
• Quote: "For the housing market to get back to a healthy level, we got to have more home sales." [17:41]

5. New Construction Will See Its Weakest Year Since Before the Pandemic

Zillow's Prediction:
Single-family starts will dip below even 2019 levels.
Dave’s Take [19:15]:

• Agrees for builders, but sees a buyer/investor opportunity due to incentives like rate buydowns and seller concessions.
• Highlights rare pricing: "the median price for a newly built home is cheaper than that of a existing home."
• Quote: "For a buyer’s perspective, this might be the best year for new construction that we have ever seen." [20:28]

6. Apartment Renters Will See Relief

Zillow's Prediction:
Rent affordability improves as wage growth outpaces rent increases.
Dave’s Take [23:10]:

• Agrees, especially for multifamily where rent growth is near flat.
• Cautions: Outlook depends on continued real wage growth.
• Quote: "If rents go up only 2.3% for a single family home, but wages...are up, let's say 4%...relatively, rents are getting cheaper." [23:21]

7. The “Lifestyle Renter” Will Emerge as a Force

Zillow's Prediction:
More Americans will choose renting for mobility/convenience.
Dave’s Take [31:10]:

• Agrees: "I think more and more people are going to choose to rent because housing is much less affordable than rentals."
• Suggests investors cater to high-quality, long-term renters.
• Quote: "I really like this idea of appealing to people who are choosing to be renters and want to live in a high quality home for a long time." [32:23]

8. “Kid-fluence” Will Steer Rental Demand

Zillow's Prediction:
Gen Alpha kids will influence rental choices, boosting demand for family-focused amenities.
Dave’s Take [33:27]:

• Skeptical: Sees “imagination centers” and similar amenities as “gimmicks” unlikely to sway most parents.
• "I have a hard time imagining parents making huge financial decisions about something like this."
• Quote: "Maybe in certain cities this will matter, but...I don't really buy this." [34:00]

9. Inflation-Savvy Home Features Will Become Mainstream

Zillow's Prediction:
Buyers will want energy efficiency and ‘grocery optimized’ features.
Dave’s Take [35:03]:

• Mostly disagrees, except for energy-efficient appliances (already mainstream), and finds “garage-based cold zones” far-fetched.
• Quote: "A walk in pantry is now an inflation savvy move? ...What difference does it make?" [35:11]

10. AI Will Move from Assistant to Transaction Coordinator

Zillow's Prediction:
AI will coordinate real estate transactions from start to finish.
Dave’s Take [36:48]:

• Only partially agrees; believes AI will aid organization but major transaction steps will remain human-driven for now.
• Cites skepticism in automation of negotiations: "I would much rather work with my agent...Maybe some people will, but I think we're still a little bit aways from that."
• Quote: "I think they're stretching a little bit...about how useful AI can actually be." [37:00]

Notable Quotes & Memorable Moments

• On overall market movement:
  "It's pretty hard a year out, especially given everything that's going on in the economy, to say, yeah, it's going to be just north of zero or just south of zero." [03:30]

• Describing affordability pressure:
  "You see all these signs that Americans are stretched and are struggling with affordability, and housing affordability is absolutely part of that." [05:52]

• On builder opportunities:
  "Because of all the things Zillow just said, and I agree with, builders are offering huge incentives... This is a really interesting opportunity for investors." [21:48]

• On skepticism of trends:
  "A walk in pantry is now an inflation savvy move? ...What difference does it make?" [35:11]
  "Garage based cold zones...I have a hard time imagining people doing that." [35:23]
  "I think these things are kind of gimmicky." [34:28]

• On AI's role in real estate:
  "Do I think AI is going to become more prevalent in real estate transactions? Yes...But I, generally speaking, think that people are overestimating what AI can do right now." [37:05]

Key Timestamps for Important Segments

• Episode Introduction & Host’s Credentials: [00:00–02:45]
• Prediction #1 — Modest Home Value Growth: [02:45–06:45]
• Prediction #2 — Underwater Mortgages: [06:45–09:45]
• Prediction #3 — Mortgage Rates Above 6%: [09:45–14:25]
• Prediction #4 — Existing Home Sales Rise: [16:26–19:15]
• Prediction #5 — Weak New Construction (Investor Angle): [19:15–22:53]
• Prediction #6 — Apartment Renter Relief: [22:53–25:50]
• Prediction #7 — Rise of the Lifestyle Renter: [30:32–33:16]
• Prediction #8 — 'Kid-fluence' in Rentals: [33:16–35:00]
• Prediction #9 — Inflation-savvy Home Features: [35:00–36:48]
• Prediction #10 — AI as Transaction Coordinator: [36:48–38:30]
• Wrap-up & Summary of Dave’s Agreement/Disagreement: [38:31–40:20]

Conclusion & Final Thoughts

Dave Meyer largely concurs with Zillow’s broad outlook on the 2026 market: expect relative stability in prices, rates over 6%, and some encouraging signs for buyers and renters. He’s nuanced with contrarian takes—for example, disagreeing on the prevalence of ‘kid-fluence’, inflation-oriented home upgrades, and AI’s transactional leap—but appreciates Zillow’s exercise in forecasts. Investors and homeowners are urged to look beyond headlines, focus on affordability trends, and adapt strategies to current opportunities, especially in new construction.

Host’s Closing Advice:
"Let me know what you think...drop them in the comments and let me know what you think." [40:14]

For more episodes and resources, visit: www.biggerpockets.com