Every December, the big real estate platforms put out their predictions for the year ahead, and every December, I get the same question from clients: “Should I believe this?” Back at the end of 2023, Zillow released six predictions for what 2024 would bring to the housing market. I want to walk through those predictions again, not just to see how they held up, but because the process of evaluating a forecast is more useful than the forecast itself. If you’re reading market predictions for 2026 or beyond right now, this is a good exercise before you take any of them at face value.

Why I’m Revisiting Old Predictions

Forecasts from big platforms like Zillow get attention because they’re backed by real data and smart analysts. But they’re also national predictions, built from aggregated data across the country, and real estate doesn’t work that way on the ground. It’s hyper-local. What happens in Montgomery County, Maryland can look completely different from what happens in Phoenix or Tampa in the same year. Any time you read a national forecast, the real value isn’t in memorizing the prediction, it’s understanding the reasoning behind it and asking how it applies to your specific market.

Prediction One: More Homeowners Would List Their Homes

Zillow’s first call was that more homes would hit the market as homeowners accepted that low mortgage rates from a few years earlier weren’t coming back anytime soon. This was the “rate lock” idea, homeowners sitting on 3% mortgages who didn’t want to trade up into a 7% rate, even if their life circumstances said they should move.

The reasoning here was sound: eventually, life happens regardless of interest rates. People get divorced, have kids, take new jobs, retire. Zillow bet that enough of these homeowners would stop waiting for rates to drop and just move. It’s a good example of a prediction rooted in behavioral economics rather than pure data extrapolation, and the kind of thing that plays out slowly rather than all at once.

Prediction Two: Affordability Would Improve, Just Slightly

The second prediction was that home buying costs would level off, with modest improvement to affordability. Zillow expected national home prices to hold roughly steady, with rates easing a bit, giving buyers’ wages and savings a chance to catch up.

This one sounds boring but matters most for regular buyers. Affordability isn’t just about home prices, it’s the relationship between prices, rates, and income. A market can have flat prices and still get more affordable if incomes rise or rates drop even slightly. Check current numbers for your area rather than assuming national trends apply directly to you, I keep updated local numbers on /stats.

Prediction Three: Single-Family Rentals Would Become the New Starter Home

This one got a lot of attention. Zillow predicted that with affordability still out of reach for a lot of households, single-family rental homes would essentially replace the traditional “starter home” for first-time buyers who couldn’t yet buy.

This reflects a real structural shift. When entry-level buyers can’t compete for entry-level homes, that inventory often gets absorbed by investors and converted to rentals, increasing rental demand and prices. Low affordability doesn’t just mean fewer buyers, it changes what kind of housing gets built and who occupies it.

Prediction Four: Rental Demand Would Surge Near Downtowns

Coming out of the pandemic, more employers required people back in the office, which Zillow predicted would drive rental demand toward downtown and urban cores. Beyond the commute, there was also expected renewed demand for the social side of city living, restaurants, bars, and walkable amenities people had been missing.

This is a good reminder that housing demand isn’t only driven by cost and interest rates. Lifestyle preferences and workplace policy shifts can move an entire segment of the market. It’s worth watching return-to-office trends in your area, not just mortgage rate headlines.

Prediction Five: Traditional Buyers Would Compete With Flippers

Zillow expected 2024 to bring more competition between everyday buyers and investors looking to flip properties, especially homes needing work. With inventory still below pre-pandemic norms, buyers would become more willing to overlook outdated kitchens and bathrooms just to get into a home, while higher costs made it harder for flippers to make the math work.

Two forces point the same direction for different reasons: low inventory pushes buyers toward “fixer” homes out of necessity, while higher renovation costs push some flippers out of the game. Traditional buyers sometimes end up facing less investor competition than in prior years, even on homes that need real work.

Prediction Six: AI Would Start Reshaping the Buying and Selling Experience

The last prediction was less about prices and more about process. Zillow expected generative AI, which had exploded in 2023, to start meaningfully improving the buying and selling experience for everyone involved.

Looking back, this is probably the prediction that’s aged the most interestingly. AI tools have made their way into real estate, valuation models, marketing content, virtual staging, chat-based search. Whether it’s fundamentally changed the buyer or seller experience the way some expected is still up for debate. I was skeptical of how big a leap this would really be, and I still think the honest answer is “it depends who you ask.” Some agents have leaned into it heavily, and some markets have barely noticed.

What This Teaches Us About Reading Forecasts

Looking at these six predictions together, a pattern emerges. The ones grounded in structural, slow-moving forces, rate lock behavior, affordability math, rental demand shifting to cities, tend to play out roughly as expected, just maybe not on the exact timeline. The ones tied to faster-moving trends, like technology adoption, are harder to call with precision.

That’s the real lesson for anyone reading a 2026 or 2027 housing forecast today. Ask yourself: is this based on something structural, like demographics, rate locks, or inventory levels? Or a trend that could accelerate or stall depending on outside factors? National predictions also flatten out regional differences that matter enormously in a market like Montgomery County, where neighborhoods like /potomac, /gaithersburg, and /germantown can behave very differently from the national average at the same time.

Frequently Asked Questions

Did Zillow’s 2024 predictions come true?

Some held up better than others. The structural predictions, more homeowners eventually listing despite rate lock, and rental demand increasing due to affordability pressure, generally reflected real trends. The AI prediction was more mixed and depends heavily on which market and agent you’re talking about.

Why do national housing predictions not always match local markets?

National predictions are built from aggregated data across the country, but real estate is driven by local supply, local job markets, and local buyer behavior. A prediction that holds true nationally can look very different in a specific county or neighborhood.

Is single-family rental demand still a factor in today’s market?

Yes. When affordability keeps first-time buyers out of the market for entry-level homes, that demand often shifts to rentals instead, keeping upward pressure on rental prices in many areas.

How should I use a housing market forecast when deciding whether to buy or sell?

Use it as a starting point for questions, not a final answer. Look at the reasoning behind each prediction, then ask a local agent how it applies to your specific neighborhood, price range, and timeline.

Has AI actually changed how homes are bought and sold?

It’s changed pieces of the process, marketing, valuations, search tools, but whether it’s transformed the core buyer or seller experience is still debatable. Adoption varies a lot by agent and by market.

If you want to see how these broader trends are actually showing up in Montgomery County right now, my /stats page has current local numbers, and if you’re weighing a move into the area, my /moco-relocation guide breaks the county down neighborhood by neighborhood.

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