U.S. housing market avoids crash, but challenges remain for buyers and sellers

After record-breaking speed and price growth in 2021 and 2022, the housing market has largely settled and avoided a crash in prices, but challenges remain. Home values are growing in line with pre-pandemic norms, a path that Zillow forecasts will continue. Rent is also back to “perfectly average” growth after its own wild ride. Buyers are finding a costly and competitive market, but one slightly calmer and easier to plan and budget for.

Sellers continue to sit on the sidelines, holding on to low mortgage rates. And while rates could tick down over time, the issue of affordability, which has grown worse over the past few years, is unlikely to significantly improve.

“The housing market is stabilizing after the turbulence of the pandemic, but the effects will be with us for a long time,” said Jeff Tucker, Zillow senior economist. “Price appreciation is back to normal after a short res