How rising energy prices could change the course of home sales
Rising energy prices due to the current geopolitical situation may impact the 2026 US housing market, with forecasts predicting a decrease in home sales. Zillow's chief economist presents three scenarios for the housing market based on the effects of higher mortgage rates and increased unemployment.
A new forecast from Zillow's chief economist shows the potential impact of the current geopolitical situation on the 2026 US housing market. The forecast presents three scenarios based on the effects of higher mortgage rates and increased unemployment. Mortgage rates have increased by about 50 basis points since February, affecting affordability. Consumers are feeling the pinch, with mortgage purchase applications falling and affordability below historical averages. Zillow's projection assumes mortgage rates will maintain an average level of around 6.5%. The labor market is also a factor, with Zillow expecting the unemployment rate to hover between 4.37% and 4.5% throughout the year.
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