10 Predictions for the 2026 Housing Market

Dave:
Zillow has released their 2026 housing market predictions. Here’s what I think they got wrong. And fair enough, what they got right too. Mortgage rates, home prices, affordability. We all want to know what’s going to happen this year in the real estate market. I’ve made my predictions. Zillow has published theirs. Let’s see how they stack up. Hey everyone. I’m Dave Meyer. I am a trained data analyst and I’ve been analyzing the housing market in particular for 15 years now, alongside being a real estate investor as well. I released my own personal predictions for 2026 mortgage rates and home prices back in December. And of course, when the biggest names in the real estate industry release their own forecasts, I like to see if my forecast is aligned, if we agree or disagree on some of the big points. So that’s what we’re going to do today.
I’ll go down the list of Zillow’s 10, 2026 housing market predictions and tell you which I think will come true and which I’m not so sure about. Zillow’s key takeaways from their predictions are that home prices will rise about 1% nationationally and that sales volume will increase 4%. They see the housing market getting healthier and better conditions for buyers. And I broadly agree with that sentiment, but not every single one of these predictions. So let’s get into them one by one. All right, prediction number one from Zillow says, “Home values will rise modestly.” They say, quote, “US home values are forecasted to grow 1.2% in 2026. After national values were roughly flat in 2025, next year’s forecast reflects expectations of gradually improving affordability and steady buyer demand. Mortgage costs should ease a bit in 2026, helping more buyers stay in the market and support modest price growth in many parts of the country.” So Zillow is saying they are expecting very modest growth, 1.2% that is a modest nominal home price.
They’re predicting, I should mention, real home prices, so inflation home prices would fall in the scenario about 2%. Now, if you didn’t watch the episode where I made my own predictions about home prices, my prediction was that home prices will come in a range of negative four to 2%. So I think roughly flat is about where we’re going to be. And if you had to ask me today, am I leaning towards plus 1% like Zillow or minus 1%? I would say minus 1%. But for all intents and purposes, I think Zillow and I are saying pretty similar things here, right? Because 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.” But I think the important takeaway here is that both Zillow and I, and I should mention other major forecasters who do these types of projections are all basically saying they don’t expect home prices to move that much on a national basis.
And that’s really where I’ve come out. Inventory growth has really sort of stalled out. We’re basically where we were a year ago. It’s same year over year, new listings are flat and demand has stayed relatively strong despite all the economic uncertainty. And because of this, we’ve sort of gotten to this point where there is relative balance in the housing market. For years during the pandemic, it was a strong seller’s market. This year it became more of a buyer’s market, but it’s coming back closer to balanced, which is why I think both Zillow and I are saying it’s going to be relatively close to flat because when things are in balance, that is what happens, right? Things are pretty much flat. Now, the reason I’ll just tell you, I’m leaning just slightly towards the negative. I would not be surprised at all if they were up 1% next year.
Not at all. But if you’re saying why, when I made my predictions back in December, I said just a little bit below zero, it’s because I think the economy is really fragile right now. The labor market is really uncertain. Inflation, we haven’t gotten data for that in two or three months now because of the government shutdown, but you see all these signs that Americans are stretched and are struggling with affordability and housing affordability is absolutely part of that. But I think what happens when we see more people struggling to pay their auto loans or struggling to pay their student debt, or just pulling back in general, we might see some fall off in demand in the housing market. Now that could be offset by falling mortgage prices, but just in the markets I operate, things are cool. Days on market are going up. No one is eager to buy right now.
Even though people are buying, it’s taking a lot longer. In all the markets I operate in, prices are feeling pretty soft. And that’s why I think over the course of next year, they’re not super likely to accelerate again unless we see big decreases in mortgage rates, which we’ll talk about in just a minute. So for prediction number one with Zillow, I think we’re directionally in the same place saying that home prices are likely to remain close to flat. I am slightly more pessimistic about prices, but generally I think we agree. Prediction number two from Zillow says fewer owners will be underwater as prices firm up. “With home values expected to rise in most major markets, fewer homeowners will see their zestimate fall below what they paid for their home.” This stands in contrast to 2025 when home values have fallen in 24 of 50 largest markets as of October, a number of Zillow forecasts will be cut in half to 12 markets next year.
Stabilizing prices means more homeowners will continue building equity rather than losing it at least on paper. Now, I was trying to not split hairs with the first prediction of being positive 1% and negative 1%, but maybe they’re making me make a call here because if I am correct and the prices are down a little bit, then I can’t agree with the second one and say that fewer owners will be underwater as prices firm up because if prices go down even 1%, I think by nature that means that you’re going to have more mortgages underwater. Now, if you don’t know what that term means, a mortgage underwater is basically when you owe more on your loan, then the property is worth. So maybe you bought a house at $300,000, you put 10% down, so you had only $30,000 in equity, you borrowed $270,000, prices go down and now the home’s worth $265,000, that is a mortgage that is underwater.
Right now, there are about 900,000 mortgages that are underwater, which is about 1.5% of the total mortgage market, and that number has definitely gone up because anytime prices go down, that’s when that starts, right? If you’re in a constantly growing market, almost no mortgages are underwater, because the value of those properties keep going up and up and up. And so being in a housing correction like we are in right now, you are of course going to see more mortgages go underwater. So that doesn’t really concern me. If you listen to our housing market updates, I talk about this a lot that mortgages being underwater doesn’t worry me on its own. If you have mortgages underwater in combination with forced selling, that’s a problem, but there’s no signs that that’s happening right now. So for me, it sounds like Zillow is saying that the correction that we’re in is going to bottom and that we’re going to see prices go up again next year.
If you’re asking me as of today, I don’t think so. I think that we are going to be very close to flat. I would say there will be marginally more mortgages underwater in 2026 than there were in 2025, but I don’t think it’s going to be dramatic. I think it’s just going to be a little bit more. All right, so that was prediction. Number two, I’m going to disagree with Zillow, but I’m guessing if we each had to forecast the total number of underwater mortgages, they would probably be pretty close, but we’re doing this for fun. And so I’m going to say, I disagree with this one. I think this one, underwater mortgages are going to go up. Prediction number three, the one you’ve probably been hoping I will get to is mortgage rates will hold above 6%. Sorry for everyone who is holding their breath for lower mortgage rates.
Zillow does not see them coming below 6%. They say, “Even for the experts for seeing mortgage rates a year out is about as difficult as predicting next year’s weather forecast. However, mortgage rates are shaped in part by inflation and Zillow has been accurately predicting shelter inflation, which makes up 40% of the consumer price index. Because of that, we are willing to put ourselves on the record. Mortgage rates are unlikely to fall below 6% in 2026. Borrowers have already seen some relief this year pushing affordability to a three-year best. Gradual rate moderation should help more buyers reenter the market, even if ultra low pandemic error rates remain far out of reach. Okay. Zillow planting their stake in the ground. Is that a saying? Plant their … What is the saying? Putting their foot down. I don’t know. They’re doing something. They are being bold and saying that mortgage rates are not going to come down below 6%.
And I agree with that. I think there might be a point in 2025 where we get into the fives. I’m not saying that that’s impossible, but if you were to ask me for the average of mortgage rates for all of 2026, I believe it will be above 6%. I said in my December mortgage rate forecast that I think we are going to have mortgage rates stay in the range of five and a half to six and a half percent. That’s for a whole year, right? Mortgage rates move a lot. So if you want to forecast where they’re going to be for a whole year, it’s kind of hard to just pick a number. So you got to give a range. That’s the range that I am giving. And if you asked me where I think the average will be, if you took an average of every day in 2026, I think they’ll be at like 6.1%, 6.15.
I don’t know. Somewhere just a little bit above six is my guess. That is an improvement from where we are today. As of this recording, they’re in about 6.3%. So I do think there is some room for improvement. I wouldn’t be surprised if they fall to six. If they fell to 5.9, I’d be a little surprised, but I’d be happy, but that’s within my range. But I agree with fundamentally what Zillow is saying here, that inflation is going to keep mortgage rates higher than most people are forecasting and most people are thinking. This is unfortunate, but inflation is likely to go up for a couple of reasons. You look at things like tariffs, you look at things like our national debt, you look at the price of inputs for manufacturers. There are a lot of reasons to think that we’re not getting below the 2% target the Fed has set in the next couple of years.
And I think there is reasonable risk that inflation keeps going up. I don’t think it’s going to go crazy, but it might keep creeping up a little bit. And that is likely to keep bond yields and mortgage rates high. I won’t get into all of the details of this, but what you should know is inflation is the number one barrier for mortgage rates coming down. And it’s really less to do with what the Fed is going to do in terms of rate cuts and has more to do with inflation. I think that’s the main theme in 2026. And so if inflation starts to come down, mortgage rates can come down more, but it’s moving in the wrong direction right now, which is why I agree with Zillow on this one that mortgage rates on average in 2026 will remain above 6%. So those are Zillow’s first three predictions.
Home values will rise modestly. I think they’ll decline modestly, but I feel pretty aligned with Zillow on that one. They said fewer owners will be underwater as prices firm up. I’m predicting the opposite, but I agree with them when they say mortgage rates will hold above 6%. We do have to take a quick break, but when we come back, we’re going to talk about existing home sales and whether sales volume will finally pick up. We’ll talk about new construction, rents, and much more. We’ll be right back. Running your real estate business doesn’t have to feel like juggling five different tools. With Ree Simply, you can pull motivated seller lists, skip trace them instantly, for free, and reach out with calls or texts all from one streamlined platform. The real magic AI agents that answer inbound calls, follow up with prospects and even grade your conversations so you know where you stand.
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Welcome back to the BiggerPockets Podcast. I’m Dave Meyer going over Zillow’s 2026 housing market predictions. Before the break, we talked about home prices. We talked about mortgage rates and we talked about the number of mortgages underwater. Let’s move on to Zillow’s fourth prediction, which says existing home sales will climb slightly. Zillow’s forecast calls for 4.26 million existing home sales in 2026, a 4.3% increase from this year’s projected total. Years of limited inventory and high mortgage rates have created a pent up demand to move that should start to release as affordability improves. A stronger than expected fall season has hinted at what’s possible this spring if recent affordability gains persist. This is optimistic, and I actually agree with them. I think that home sales will climb up a little bit. I think demand has been pretty good this fall, surprisingly good. And although I have my concerns about the economy, I do think demand is not going to fall off a cliff.
I think we might see more supply than people are expecting and some of the de- listings that have been coming off the market recently might go back up, which is why I’m kind of leaning towards modestly negative home prices next year, but I am optimistic that we will start to see more home sales. Now, I know for most people home prices and those predictions are what people really care about. That’s kind of the sexy thing to look at, but for the housing market to get back to a healthy level, we got to have more home sales. It’s just slow. This year we are on pace for about four million existing home sales, which may sound like a lot, but it is well below the long-term average of 5.25 million. So we’re more than 20% down from normal. And it feels particularly dramatic because during the pandemic, we are at abnormally high levels of home sales like six million.
And so we’re down about 50% from where we were in 2022. That’s why the market, I think, feels so slow to people. But for anyone who works in the industry, if you’re an agent, a lender, a property manager, this should be good news. It’s probably not where you want to be. They’re saying it will go up to four and a quarter million. It’s not a good year. In any other year, this would be a bad year, right? But we got to see things turn around and hopefully they are correct and this is a baby step towards more housing activity incoming years. And so I’m going to agree with this one that existing home sales will climb slightly. Zillow’s fifth prediction is about new construction. They say new construction will see its weakest year since before the pandemic. Zillow says, quote, 2026 is shaping up to be the slowest year for single family home construction starts since 2019, following a notably weak year in 2025.
Because there’s a large stock of new homes already built and others still under construction, builders are expected to hold back on starting new projects. Single family starts are trending 5% below last year’s pace as of the latest reading in August. A further 2% drop off of that pace in 2026 would bring starts below the roughly 947,000 homes begun in 2023. Currently, the low watermarks since the start of the pandemic. Expect builders to continue leaning heavily on incentives such as rate buydowns to keep inventory moving, particularly in markets where affordability remains tight. So do I agree that we’ll see less total new construction starting in 2026 than 2025? Yeah, I think that’s probably likely. We have seen an incredible amount of incentives have to be used to move inventory in 2026. And with just unclear forecast for inflation and affordability, builders might pull back a little bit further in 2026.
So I generally agree with this, but I just want to say their headline that this is going to be the weakest year for new construction since before the pandemic, that’s from the builder’s perspective. I just want to offer a different perspective because from a buyer’s perspective, from an investor’s perspective, this might be the best year for new construction that we have ever seen. Actually, as of this recording, the median price for a newly built home is cheaper than that of a existing home. That has never really happened before. And this, I have said before on the show, I think is a really interesting opportunity for investors because of all the things Zillow just said, and I agree with, builders are offering huge incentives. They’re buying down mortgage rates. They’re offering seller concessions. They’re offering free upgrades to sort of like spruce up the finishes on a home.
They don’t really like lowering the price, but if you negotiate really hard, they might be willing to do that, but they’ll probably do lots of other things worth tens of thousands of dollars to get you to buy a home. And so I continue to believe that we’re in this very unique time where new construction is a viable option for real estate investors. It’s not good everywhere. It really depends on the location. A lot of new construction happens to be out in sort of these remote, random kind of tertiary markets or like in the suburbs of a tertiary market. I wouldn’t buy that stuff personally, but there are places where you can actually in good markets with strong fundamentals buy new construction at a good rate. It’s probably not going to be the best cash on cash return ever, but if you can find ones that’s cash flowing, you might actually do better on that in terms of cash long term because your CapEx, your repairs, your maintenance costs are going to be lower.
And that’s really appealing because everything is brand new. But also secondly, if you’re getting a rate buydown into the fours, which I have absolutely heard happening, this is definitely happening. A rate died down into the forest, definitely into the fives. Your cashflow might not be that different from an existing home because yeah, you might be paying a little bit more, maybe not, depending on the market you’re in, but your costs are going to be a little bit less, your rent’s going to be higher because you’re renting out a brand new home and your financing costs might actually be lower. So I think the weakness that Zillow is citing for new construction is actually strength for investors and buyers of new construction. It’s one of the things I’ve personally looked at a little bit. There’s not a lot of new construction in the markets I’m investing in right now, so that’s the reason I haven’t pulled the trigger on it, but I know other investors in Texas and Florida who are doing these kinds of deals because they’re getting deep value on them.
So something depending on where you live, you could consider for your 2026 strategy. All right, let’s move on to Zillow’s sixth prediction, which is that apartment renters will see relief. They say rent affordability is expected to continue improving in most of the country after a year in which 35 of the 50 biggest markets saw incomes grow faster than rents. A median income household would spend 27.2% of income on the typical US rent as of October, the lowest share since August of 2021. Zillow forecasts multifamily rents to rise just 3% in 2026, giving incomes a chance to catch up even further. Single family rents are projected to climb by 2.3% as many buyers delay home purchases. Okay. So will apartment renters see relief? Yes, I agree with this one for sure. I think there’s an important caveat for everyone to understand because you might be thinking Zillow just said rents on single family homes are projected to go up 2.3% as of this year.
How is that relief for apartment renters? And this just comes down to some basic economic stuff here. But what Zillow is saying is that if rents go up only 2.3% for a single family home, but wages, the average amount that people earn is up, let’s say 4%, it’s kind of close to where it is today. If went up 4%, then relatively rents are getting cheaper, right? Even though the price you pay on paper is going up, your ability to afford that rent is improving because your income is rising faster than your rent. And I do agree with that, particularly on the multifamily side. I don’t think we’re going to see much growth in rent on multifamily. They’re close to flat. They’ve been flat for a while. I know that we are working through this multifamily glut. I am very well aware of that, but I just think this is just me.
I think household formation is going to be muted in the next year. We’re seeing data from all over the economy that people are struggling, car payment, delinquencies are going up, student loan delinquencies are going up. It’s not an emergency by any means, but it can weigh on household formation. The other piece of this though is the wage piece. And I am hopeful that wage growth will continue to stay positive. There is this thing in economics, it’s called real wage growth. It’s like, is our wage is growing faster than inflation? And that has been one of the bright spots of the economy since I think it was February 2023, we sort of crossed this threshold where wage growth was higher than the rate of inflation. And that has still happened. We’ve had that for the last, I guess it’s almost two years now. We’ve had real positive wage growth.
Now the amount of that real wage growth has declined a little bit. It was about 2% a year ago. Now it’s about 1%, but I’m hoping that that will continue. I do have some fears about that. I’ll be honest with AI and rising unemployment rate, people tend to lose negotiating leverage in their wage negotiations. And so that can lead to lower real wages, but I am optimistic that wage growth will stay above the pace of rent increases. So I say yes to Zillow, apartment renters will see some relief. All right, we have made it through six of Zillow’s 10 predictions for the 2026 housing market. I got four more for you though. We got to take a quick break. We’ll be right back. The Cashflow Roadshow is back. Me, Henry, and other BiggerPockets personalities are coming to the Texas area from January 13th to 16th.
We’re going to be in Dallas, we’re going to be in Austin, we’re going to Houston, and we have a whole slate of events. We’re definitely going to have meetups. We’re doing our first ever live podcast recording of the BiggerPockets Podcast, and we’re also doing our first ever one-day workshop where Henry and I and other experts are going to be giving you hands-on advice on your personalized strategy. So if you want to join us, which I hope you will, go to biggerpockets.com/texas. You can get all the information and tickets there.
Welcome back to the BiggerPockets podcast. I’m Dave Meyer going through Zillow’s 10 2026 housing market predictions. So far, I think we’re agreeing in principle on most things. I’m nitpicking a couple things here or there because that’s why we’re doing this podcast episode. But I think overall, we see the housing market in relatively similar ways, but let’s go on. We got four more to go and we’ll see if we agree or disagree. Number seven reads, “The lifestyle renter will emerge as a force.” Zillow says, quote, “For a growing share of Americans, renting is a deliberate choice that supports mobility, reduces home maintenance burdens, and better fits the way they want to live.” Nearly three in five renters say they plan to keep renting next year, according to the Zillow Consumer Housing Trends Report. Even if mortgage rates dropped, only 37% say they would buy down from 45% last year.
This is just another example of why I’m saying I think household formation is probably going to be tepid this year. I just don’t think we’re going to see a lot of it because even if mortgage rates drop, if you do the math, for most people, for a lot of people, renting is still a better decision. Now, this is a real estate investing podcast. I’m not saying it’s a better decision than investing in real estate. I have made the argument many times that I think renting and buying rental properties is actually a great way to grow your portfolio, but I’m saying that if you were just to do the straight up math of, should I buy a home or should I live in a similarly priced rental, oftentimes the rental is better. Now, if you plan to live in that home or that rental for six, seven years, the math changes.
But if you’re just trying to figure out where you’re going to live for the next couple of years, rentals are often better. And so I do agree with this idea that lifestyle renters will emerge as a force. I think there are going to be people who choose to rent indefinitely. Looking at the housing market, looking at the rising costs of maintenance, of insurance, of taxes, like these expenses, we all know this as investors, right? That stuff’s going up. I understand that some people just see this and they’re like, “Man, it’s too expensive. I don’t want to deal with the stress. I like having a landlord.” And I know people have really strong opinions with that, but I do think we’re going to see more and more people opting for that. Now, what does this mean for real estate investors? I think the market for higher end and single family rentals is going to be strong for the foreseeable future.
I think if you as a landlord can offer a family a stable place to live in a good neighborhood that they feel like they can comfortably live in for three, four, five years, those are going to be really high demand and you’re probably going to be able to get really good renters. 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. To me, that creates really good mutual alignment between the property owner and the renter. You both want the place to stay in good condition. You don’t want vacancy, you don’t want to move, you don’t want to leave, and you want a stable, predictable thing. I personally would be willing to think about longer term leases to these kinds of people with maybe a fixed or maximum rent increase for a couple of years to make them feel comfortable.
I think those kinds of things are great ways that tenants and property owners can work together to make rental housing more comfortable for people who are choosing this renter lifestyle. Now, I know this isn’t for everyone. I’m not saying that everyone should be a renter forever. It’s really a personal choice, but this isn’t even a judgment. I just am making a prediction. I think more and more people are going to choose to rent because housing is much less affordable than rentals. And I do think it is wise for investors to adapt and try to offer products that are appealing to these types of people. So that’s number seven. Moving on to prediction number eight. Zillow says kid fluence. I have not heard this word. I think they’re trying to coin a new term. Kidfluence will steer rental demand. They say, quote, “Lifestyle renting and affordability realities are changing who rents and what they need from their homes, like we were just talking about.
” Then they go on to say 37% of renters now have a child younger than 18 at home up from 33% a year ago, according to the Ziler Consumer Housing Trends Report. With Generation Alpha influencing close to half of their parents’ spending, families are bringing those prefaces into housing decisions as well. With parents making up roughly one third of today’s apartment shoppers, buildings that offer family-friendly amenities like imagination centers or homework pods will be better positioned to compete. I don’t know about this one. I’m sorry. Maybe I’m just old school about this, but I just imagine my parents, if they were shopping for an apartment and they just got a better deal on one, they would just take that regardless of if it had an imagination center or a homework pod in it. I don’t know if that’s just me and my parents, but I don’t really buy this.
Like maybe in certain cities this will matter, but I just have to imagine that if you are choosing to rent, yeah, probably school district matters and yeah, they want to be in a neighborhood that is safe, that is good for their children, where their friends live, where your friends live, where family lives, but I think these things are kind of gimmicky. Like maybe if there was two buildings sitting next to each other and they were the same rent, the same layout, the same square footage, and one of them had an imagination center and the other one did not have an imagination center, maybe the one with the imagination center wins, but I have a hard time imagining parents making huge financial decisions about something like this. It’s just, I think they’re trends. Everyone two years ago was like, “Oh, if you had a coworking space in your building, rents were going to go up.” I don’t think that’s really true anymore.
I’ve been in a lot of buildings where there’s a coworking space. I don’t think I’ve ever seen a desk be … Being used in my life. These things are a little bit gimmicky and I don’t think they’re really going to make a lot of influence over people’s decisions. So Zillow, I’m disagreeing with you on this one. Zillow’s ninth prediction is inflation savvy home features are becoming mainstream. They say, quote, “Rising household expenses will continue reshaping what buyers look for in a home. Energy efficient features such as zero energy ready homes, whole home batteries and EV charging stations are appearing more frequently in listings. Zillow predicts families will gravitate towards homes that are energy efficient and grocery optimized. Think walk-in pantries, garage-based cold zones for bulk storage, refrigerated drawers and smart organization systems that help families shop smarter and keep food fresh longer. Oh, no. What?
I’m sorry. I just don’t even understand what this is talking about. A walk-in pantry is now an inflation savvy move. What? That’s just where you keep your food. What difference does it make if it’s a walk-in pantry or just a regular drawer or a cabinet or you keep it on a shelf? What difference does it make? Garage-based cold zones. I don’t think people are going to start building this. Again, I think these are gimmicks that yeah, maybe people are putting them in listings. Maybe ChatGPT has decided these things are important. And so for all the agents out there who are using ChatGPT to make their listings, they are putting these things, but geez, I do not see this being mainstream at all. If you look at the zero energy, I don’t know about that either. How about this? I think if you look at energy efficient appliances, I’ll give you that.
Like you see stuff like WaterSense, which is like this EPA rating about water efficiency. Yeah. If you had a choice to use a toilet that’s going to cost you less money because it uses less water and it’s the same price, sure, people might be able to use that. Or if you have a fridge that is more energy efficient, it’s going to save you on your energy bill, or you get a heat pump that’s more energy efficient, save you on your energy bill. Yes, I think those things are probably going to be popular, but that’s not different. Like that is already mainstream. People already look at those things. There are stickers on every appliance telling you how much energy they use and people already are factoring those things into these decisions. So sorry, Zillow, I don’t see this one as a trend for 2026. I’m sorry.
All right. Zillow’s last prediction for 2026, AI will evolve from helpful assistant to transaction coordinator. They say, quote, “In 2026, AI will move beyond offering advice and begin coordinating steps in buying, selling, and renting process. Instead of simply recommending actions, AI assistants will help manage tasks end to end from connecting buyers and sellers with the right real estate agents to tour scheduling, to negotiations and closing prep. This agentic approach will streamline decisions, automate routine work, and make the transaction feel more predictable for everyone involved.” Okay. Maybe. Yeah, a little bit, but come on. I guess the problem is people will call anything AI. They still tour scheduling. If you were to go on showing time, you could just select a tour from a schedule. Is that AI? Why does AI need to get involved in that? It is already about as automated as possible. Does it have to predict what day you want to go and schedule it ahead of time?
I think they’re stretching a little bit on some of these things about how useful AI can actually be. Do I think AI is going to become more prevalent in real estate transactions? Yes. I do think for document management, for closing management, transaction coordination stuff like that, I think could be helped. Is it going to help in negotiations? I don’t think so, if I’m just being honest. I just don’t think that’s going to weigh into this. I personally would not trust AI to negotiate for me. I would much rather work with my agent and the seller’s agent to negotiate on something. Maybe some people will, but I think we’re still a little bit aways from that. So Zillow, I’ll give it to you on a couple small things, but I’m guessing a year from now, the transaction process for buying and selling real estate is going to look pretty much the same way it does today.
I’m not saying that’s going to last forever. I do think AI will evolve and become more involved in real estate, but I generally speaking, think that people are overestimating what AI can do right now. It’s a great research tool. I use it all the time for research, but interacting and connecting between actual humans is not really doing that right now. And maybe something will change in the next year, but I think we’re a little bit further out than that if I had to guess. So Zillow, not agreeing with you on this one either. All right, so that’s what we got. We had 10 predictions from Zillow. First one was home values will rise modestly. Although I’m a little bit more pessimistic, I’m generally in the same sense as Zillow that I think prices are going to be pretty much flat, nominal terms. I think they’re going to be down in real terms.
I disagree that fewer owners will be underwater, but I agree that mortgage rates will hold above 6%. I had a few more I agreed with Zillow on that existing home sales will climb, that new construction will be weak for sellers, but good for buyers, and that apartment renters will probably see some relief. But I disagreed with this idea of kid fluencers, not my area of expertise, but this just sounds off to me. I also disagree that their inflation savvy home features are going to emerge as mainstream. I will bet you next year, if I asked everyone I know if they have a garage based cold zone for bulk storage, 100% of them will say no, but maybe that’s a bet some of you are willing to take. Let me know. And I also disagree that AI is going to fundamentally transform how transactions are done in the next year.
I think it will be good for organization, for streamlining communications, but at the end of the day, it’s still going to work the same way one year from now as it does today. Those are my takes on Zillow’s predictions, but let me know what you think. We’ve gone through all 10 of them. I’m sure you all have your own opinions, so drop them in the comments and let me know what you think. That’s all we got for you today on the BiggerPockets Podcast. Thanks for joining us. We’ll see you next time.