Zillow’s 2026 Housing Market Outlook & What They Mean

After several years of volatility, the housing market is expected to move into a more balanced and predictable phase in 2026. According to Zillow’s latest housing market predictions, buyers should experience slightly improved affordability, while sellers benefit from steadier demand and price stability.

Originally published on December 15th, 2025. Updated for accuracy.

For Orlando and Central Florida, this shift is especially important. As the market adjusts, understanding national forecasts and how they translate locally can help homeowners, buyers, and renters make smarter decisions heading into the new year.

Home Values Are Expected to Rise Modestly

Zillow forecasts that U.S. home values will increase by approximately 1.2% in 2026 after a relatively flat year in 2025. This growth is driven by improving affordability and consistent buyer demand rather than speculative price surges.

In Orlando, this points to a healthier market where pricing becomes more predictable. Homes that are well priced and well presented should continue to attract serious buyers, while sellers benefit from greater confidence in value stability.

Fewer Homeowners Will Be Underwater

As prices firm up across most major markets, Zillow expects fewer homeowners to owe more than their homes are worth. In 2025, home values declined in a significant number of large markets, but that number is projected to shrink considerably in 2026.

For Orlando homeowners, this trend supports equity preservation and gradual equity growth. Stabilizing prices mean more sellers can make decisions based on opportunity rather than pressure, especially those considering a move or a strategic sale.

Mortgage Rates Are Likely to Stay Above 6%

Zillow predicts that mortgage rates will remain above 6% throughout 2026. While this may feel high compared to historic lows, gradual rate moderation has already helped improve affordability to its best level in several years.

For Orlando buyers, this means the focus should shift from waiting for dramatic rate drops to making smart decisions based on lifestyle needs, long-term plans, and local market conditions. Sellers should expect buyers to be more payment conscious, placing greater importance on pricing and presentation.

Existing Home Sales Should Increase Slightly

Zillow projects that existing home sales will rise modestly in 2026 as pent-up demand begins to release. Years of limited inventory and elevated rates have kept many buyers on the sidelines, but improving affordability is expected to bring more activity back into the market.

In Central Florida, this could translate into more consistent showing activity and stronger competition for well-positioned listings, particularly in desirable neighborhoods and price ranges.

New Construction Activity is Expected to Slow

Despite ongoing demand, Zillow anticipates that 2026 will be one of the slowest years for new single-family construction since before the pandemic. Builders are responding to existing inventory levels and affordability challenges by slowing new starts.

In markets like Orlando, this may benefit resale homeowners. With fewer new homes coming online, existing properties that are move-in ready and competitively priced may stand out even more, especially as builders continue offering incentives to move current inventory.

Renters are Expected to See Some Relief

Zillow forecasts that rent growth will remain modest in 2026, allowing incomes to continue catching up after several challenging years. Multifamily rents are expected to rise only slightly, while single-family rents may increase more as some buyers delay homeownership.

In Orlando, this trend reinforces the importance of flexibility. Renters may have more leverage, while investors and landlords should remain mindful of pricing and tenant expectations.

Lifestyle Renting and Family Needs are Reshaping Demand

Renting is no longer just a stepping stone to homeownership. According to Zillow, many renters are choosing flexibility, mobility, and reduced maintenance as intentional lifestyle decisions.

At the same time, more renters now have children at home, which is influencing demand for family-friendly features and shared amenities. In growing metros like Orlando, rental properties that accommodate modern family needs are likely to remain competitive.

Energy Efficiency and Smart Home Features are Gaining Importance

Rising household costs are pushing buyers toward homes with energy-efficient features. Zillow notes growing interest in energy readiness, battery storage, EV charging, and smarter food storage solutions.

In Florida, where utility costs and climate considerations matter, these features can enhance both appeal and long-term value. Sellers who highlight efficiency and functionality may gain an edge in 2026.

AI Will Play a Larger Role in Real Estate Transactions

Zillow predicts that artificial intelligence will evolve from a helpful tool into a more active coordinator in real estate transactions. From scheduling tours to organizing paperwork, AI is expected to streamline the buying, selling, and renting experience.

While technology will continue to improve efficiency, local expertise and human guidance will remain critical. Navigating Orlando’s neighborhoods, pricing nuances, and negotiation strategies still requires experienced real estate professionals.

What Zillow’s 2026 Forecast Really Means for Orlando

Zillow’s 2026 housing market predictions point to a year defined by balance rather than extremes. For Orlando buyers and sellers, this creates opportunity for thoughtful, strategic decisions grounded in data rather than urgency.

A more stable market rewards preparation, pricing accuracy, and expert guidance. Whether you are planning to buy, sell, or reassess your housing strategy in 2026, understanding how national trends intersect with local conditions is key.