Zillow’s Own Research Team Says Renters Are Paying More Every Month While Home Values Barely Move at All, and the Widening Gap Is Trapping People Who Thought This Would Finally Be Their Year to Buy

Zillow’s Own Research Team Says Renters Are Paying More Every Month While Home Values Barely Move at All, and the Widening Gap Is Trapping People Who Thought This Would Finally Be Their Year to Buy

Two very different trend lines

Home values are projected to rise just 0.3% nationally in 2026, according to Zillow’s own research team’s August 2026 housing forecast, a sharp slowdown after years of rapid appreciation. Rents are moving the opposite direction: Zillow projects single-family rents will climb 2.1% this year to a typical monthly payment of $2,300, while multifamily rents are expected to rise 1.8%. Zillow’s own forecast noted that rent growth expectations “accelerated 13% from last month,” meaning the rental market is heating up faster than economists were predicting just weeks earlier.

Low-angle photograph of a high-rise apartment building against the sky

What Zillow’s economists say is happening

“The rental market is picking up steam as we head into the home stretch of 2026, while the for-sale market may be running out of it,” Zillow’s research team wrote in the report. The reasoning is straightforward: with home values barely appreciating, and mortgage rates keeping monthly payments high, would-be buyers are staying put in rentals rather than pulling the trigger on a purchase. Zillow’s own language describes it directly: “affordability constraints keep would-be buyers on the sidelines and in rentals longer than they might otherwise choose.”

The trap in practice

That’s the squeeze for anyone who spent the past year renting and saving, expecting flat or falling home prices to eventually make ownership more attainable. Instead, the rent they’re paying keeps climbing, cutting into the very savings they’d use for a down payment, while the homes they’re eyeing aren’t getting meaningfully cheaper to offset it. Zillow’s data shows existing home sales are expected to reach 3.78 million in 2026, up 1.5% from last year, but the fourth quarter is projected to see a 3.2% decline, suggesting the modest sales momentum built earlier in the year is already fading.

Not every market is moving the same way

Zillow’s report also flags specific metro shifts worth watching. San Francisco is seeing rental acceleration pick up noticeably, while Austin, Denver, Dallas, and Raleigh, all cities that had rents falling for months, are now transitioning toward year-over-year rent growth. That’s a meaningful reversal for renters in those Sun Belt metros who had gotten used to landlords competing for tenants; the leverage appears to be shifting back toward property owners even as home prices in some of those same cities stay flat or dip. If you’re renting anywhere near one of these markets and had penciled in 2026 as your buying year, Zillow’s own numbers suggest the math may be getting harder rather than easier before it improves.

Willow and Hearth