A year ago, Zillow’s economists were telling the housing market to brace for another 4% to 5% jump in home prices. That projection is dead. In its 2026 housing outlook, Zillow now expects essentially flat national appreciation, framing the year ahead as one of steadier footing and more completed sales rather than another price surge. JPMorgan’s U.S. housing strategy team has trimmed its own 2026 price-growth estimate to roughly 3%, and National Association of Realtors chief economist Lawrence Yun has publicly projected gains of about 2%, citing mortgage rates stuck near 6.5% as the primary drag on buyer purchasing power.
Then there is the number that sellers cannot ignore: according to Redfin’s weekly housing tracker, approximately 36% of active listings carried a price reduction as of late May 2026, the highest share at this point in the selling season since 2019.
Taken together, the downgrades from three of the industry’s most-watched forecasters raise a blunt question: has the post-pandemic seller’s market finally stalled out?
What the revised forecasts actually say
Start with Zillow, whose language has shifted noticeably. The company’s researchers expect 2026 to bring steadier footing, with transaction volume recovering even as price growth flatlines. That is a meaningful distinction. Zillow is no longer betting on appreciation to carry the market; it is betting on more people simply being willing to buy and sell at current levels. For buyers trying to time an entry and sellers calibrating their ask, the difference between a 4% tailwind and a 0% tailwind is tens of thousands of dollars on a median-priced home.
JPMorgan’s downgrade, detailed in a spring 2026 research note from its housing strategy desk, pointed to inventory growth in the South and Mountain West outpacing local demand. Markets like Austin, Phoenix, and Tampa have seen active listings climb well above pre-pandemic norms, giving buyers options they have not had in years. NAR’s Yun, speaking at the association’s midyear policy conference in May, argued that affordability constraints are capping how aggressively buyers can bid, even in metros where supply remains tight. With the average 30-year fixed rate hovering near 6.5% according to Freddie Mac’s Primary Mortgage Market Survey, monthly payments on a median-priced home are still roughly 30% higher than they were in early 2022.
Zillow’s own data reinforces the power shift. Its October 2025 market report flagged buyer-friendly conditions in 19 major metro areas, a count that would have been nearly unthinkable during the pandemic frenzy, when virtually every metro favored sellers. By spring 2026, with inventory continuing to build, that list has likely grown. The loosening helps explain why more than a third of sellers have resorted to cutting their asking price.
One fear the data does push back on: a repeat of 2008. Even as price growth stalls nationally, most owners who purchased in recent years still hold meaningful equity. Zillow’s research suggests that the share of homeowners whose estimated value has fallen below their purchase price remains small. Widespread negative equity, the hallmark of the last housing crisis, is not part of the current picture.
New York City is a notable outlier. Zillow’s StreetEasy division published a separate forecast indicating that buyers in New York City should not expect the same degree of cooling. In several boroughs, constrained inventory and persistent demand from higher-income purchasers are keeping prices firmer than in much of the country. For would-be NYC buyers, that means less leverage at the negotiating table, even as national headlines describe a more balanced landscape.
How the new forecasts affect buyers
If you have been sitting on the sidelines, the emerging consensus tilts toward patience over panic. When three major forecasters agree that 2026 will deliver modest gains at best, the financial penalty for buying later rather than sooner shrinks considerably. A year ago, waiting six months might have cost a buyer $15,000 or more in appreciation on a $400,000 home. Under a flat forecast, that cost drops close to zero.
The experience will vary sharply by geography. In Sun Belt metros where inventory has ballooned, longer listing times and frequent price cuts could translate into real savings and room to negotiate on closing costs, repairs, or rate buydowns. In still-tight markets like New York, Boston, and parts of coastal California, the window for negotiation remains narrow. Buyers in those areas should not assume national trends apply locally.
The psychological shift matters as much as the math. During the pandemic run-up, buyers routinely waived inspections and bid tens of thousands over asking out of fear that waiting even a few months would price them out permanently. The current forecasts undercut that fear-of-missing-out dynamic. Walking away from a bad deal carries less risk than it did in 2021 or 2022, and that alone changes the power balance at the offer table.
Financing strategy deserves a rethink, too. Slower price growth reduces the pressure to stretch for a maximum purchase price on the assumption that equity will quickly catch up. Buyers may be better served by prioritizing monthly payment comfort, choosing a slightly smaller home or a less expensive neighborhood rather than banking on rapid appreciation to justify an aggressive purchase. With the Federal Reserve holding rates steady through its most recent meetings and signaling a cautious path forward, mortgage rates are unlikely to plunge. But even a modest decline into the low 6% range later in the year could widen the pool of affordable options without requiring buyers to rush.
What sellers should take from the shift
For sellers, the revised outlook is a warning against pricing off last year’s comps. The 36% price-cut rate is not an abstraction; it reflects thousands of listings where the original ask did not survive contact with actual buyers. In markets Zillow now labels buyer-friendly, homes priced too far above recent closed sales are sitting for weeks and ultimately selling only after one or more reductions. Sellers hoping to avoid that pattern need to price for the market they are in, not the one they remember.
That does not make it a bad time to sell. Most owners still hold significant equity built up over the past several years, and the forecast that relatively few will slip into negative territory means the vast majority can transact without distress. But maximizing that equity increasingly depends on presentation and strategy. Clean, move-in-ready homes priced realistically are far more likely to draw early, competitive offers than properties that assume the bidding wars of 2021 are still the norm.
Even in New York City and other pockets where demand remains intense, the broader national cooling could temper buyer behavior. Out-of-town purchasers who once felt compelled to overpay for a foothold may now be more disciplined, especially if they see better value in metros that have shifted decisively toward buyers.
What the lock-in effect means for inventory going forward
One wildcard that none of the three forecasts fully resolves: the so-called lock-in effect. Roughly 60% of outstanding mortgages carry a rate below 4%, according to Federal Housing Finance Agency data. Many of those homeowners are reluctant to sell because doing so means trading a cheap mortgage for one at 6% or higher. That dynamic has suppressed listings for three years running and is a key reason inventory, while rising, remains below 2019 levels in most metros.
If rates drift lower, even modestly, some of those locked-in owners may finally list, adding supply and reinforcing the flat-price outlook. If rates stay elevated, inventory growth could slow, providing a floor under prices. Either way, the interplay between rates and the lock-in effect will likely determine whether Zillow’s flat forecast proves too optimistic or too cautious.
For anyone planning a purchase or sale in the months ahead, the practical takeaway is to focus less on national averages and more on the data in your specific market. A buyer in Phoenix is operating in a fundamentally different environment than a buyer in Manhattan. Use the revised forecasts as a framework, not a guarantee, and lean on recent comparable sales rather than headline projections. In a steadier market, careful pricing, realistic expectations, and patience on both sides of the transaction are likely to matter more than perfect timing.
