Cautious buyers are holding back on buying homes, creating a glut of existing properties on the market, while tenants are benefiting from a slowing trend in rent increases, according to Zillow’s home value and sales forecast for July 2025.
The forecast predicts home values will move lower through the end of 2025, ending 0.9% below starting levels. The slip was saved from being deeper because new listings of existing homes also fell in July.
Nevertheless, the new listings are expected to rise faster than sales, along with the inventory of homes on the market for the rest of the year, especially in the West and South.
Compared to 2024, the number of existing homes for sale will rise 0.6% to 4.09 million by the end of 2025.
The report attributed the mismatch between the buying and selling of properties to weak consumer finances and “a surprisingly more sluggish labor market.”
Rent growth has also been affected.
“This year would mark the lowest annual increase for single-family rents of any calendar year since at least 2018, when Zillow’s data history for this metric begins. For multifamily rents, it would be the lowest increase since 2020,” the report noted.
The slowdown is expected to last through the rest of the year. Single-family rent growth is forecast to slow to 2.5% this year compared to 4.5% in 2024. Multifamily rents are projected to rise 1%, compared to 2.4% in 2024. In each case, the numbers reflect a downward revision.
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