Moody's Calls The Housing Market Turn For 2026

 



Supply wins over demand in 2026.

That's the core of Moody's latest forecast. We've been tracking the data behind it, and the timing is more specific than most realize.

Moody's chief economist Mark Zandi predicts that housing supply increases will outweigh demand support from lower interest rates, creating downward pressure on prices through 2027. The forecast points to approximately 150,000 new homes entering the market between 2025 and 2027.

The mechanics are straightforward. More inventory means less pricing power.

The Timing Is Specific

We're watching inventory levels normalize faster than expected. Active listings increased 22% in 2024, and the market is on pace to return to pre-pandemic inventory levels by mid-2026.

Here's where it gets precise.

Months of inventory reached 5.6 in April 2025, the highest since October 2011. Forecasting models show the market crossing into buyer's market territory (7+ months of inventory) between mid-2026 and mid-2027. June 2026 is the most probable inflection point.

That's a narrow window for appreciation-focused strategies.

Regional Evidence Is Already Visible

Some markets are already feeling the pressure. Zillow forecasts price declines in over 608 metro areas by April 2026, with a national decline of 1.4% through 2025.

Florida and Texas show the clearest patterns. Florida home prices are down 5.4% year-over-year. Texas is down 0.59%. These markets saw pandemic booms followed by aggressive development, and they're now experiencing supply-driven corrections.

The pattern is predictable. Oversupply in previously hot markets creates downward price pressure.

What This Means For Strategy

For investors, the appreciation window is closing. Properties acquired for value growth face headwinds starting mid-2026.

For buyers, waiting has merit. The data suggests more favorable pricing conditions in 12 to 18 months.

For developers, timing matters. Projects need to reach market before the supply surge compounds pricing pressure.

We're not predicting a crash. Moody's forecasts modest price growth of 1-4% annually, replacing the double-digit pandemic gains. The market is normalizing, not collapsing.

But normalization after a supply-constrained period means one thing: the seller's advantage diminishes as inventory rises.

The forecast is clear. The timing is specific. The strategic implications depend on which side of the transaction you're on.

At Zavora Group, we're monitoring these supply dynamics closely. The data points to a fundamental shift in market conditions that requires adjusted positioning across all property segments.

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