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Home prices reached an all-time high in early 2025, only to dip, recover, and return to almost exactly where they started.
Nationwide, Zillow forecasts home prices will rise a modest 1.2% in 2026. But all real estate is, of course, local, and national trends conceal huge discrepancies in local markets.
So which cities does Zillow forecast to see the largest gains and losses in 2026? What trends underlie those movements? And how am I investing to capitalize on these trends?
Top 10 Cities for Projected Gains
Looking at the latest 12-month home price projections from Zillow, the actual top 10 are micro-markets that tell us little about larger trends. Pulling out the top 10 “significant size” cities, however, some trends do start to emerge:
Atlantic City, NJ: 5.3%
Knoxville, TN: 4.3%
Green Bay, WI: 4.1%
New Haven, CT: 4%
Hartford, CT: 3.9%
Manchester, NH: 3.8%
Appleton, WI: 3.7%
Erie, PA: 3.1%
South Bend, IN: 2.9%
Lexington, KY: 2.8%
Most of those cities feel decidedly “unsexy,” located in either the Rust Belt or the old and mellow Northeast.
Wisconsin native and real estate investor Austin Glanzer of 717HomeBuyers told BiggerPockets that it makes perfect sense. “Cities like Appleton and Green Bay combine steady job demand with relative affordability, which is exactly what’s driving price growth in secondary Midwest markets,” he added. “Buyers who are priced out of primary metros are still able to find attainable housing here, creating durable demand rather than speculative growth.”
Top 10 Cities for Projected Losses
On the other end of the spectrum, Zillow projects these cities to see the largest losses:
New Orleans, LA: -4.7%
Shreveport, LA: -4.3%
Fairbanks, AK: -3.2%
Austin, TX: -2.6%
Corpus Christi, TX: -2.4%
San Francisco, CA: -2.2%
Denver, CO: -1.3%
Cheyenne, WY: -1.1%
Sacramento, CA: -1%
Colorado Springs, CO: -1%
That list looks decidedly different from the first, largely located in the Sun Belt or once-rarified West. Many of those cities saw skyrocketing growth in the not-too-distant past.
“Many of these cities experienced massive run-ups during the pandemic boom and remote-work migration peak,” notes investor Pavel Khaykin of Pavel Buys Houses, in a conversation with BiggerPockets. “We are witnessing a correction driven by factors like elevated inventory levels, high mortgage rates dampening demand, affordability constraints, and high property taxes.”
Trends Playing Out in 2026
The cities projected for stronger-than-average price growth in 2026 share several things in common. “In Midwestern cities like Green Bay and Erie, supply remains tight, and employment is stable, but prices are still accessible compared to national averages,” explains Lesley Hurst, owner of Penn Charter Abstract, to BiggerPockets. “Markets like these tend to outperform during uncertain cycles because they’re driven by end-user demand, not investors chasing appreciation.”
Home prices in these cities remain closely tied to local incomes and fundamentals, unlike markets that got out ahead of their skis, like, say, San Francisco, Austin, and Denver.
Most lending industry analysts expect mortgage rates to stay above 6% in 2026. Zillow certainly does, and Redfin agrees, forecasting 6.3% average rates for the 30-year. So, don’t expect interest rates to move the needle on home prices.
What will help lift home prices is the lack of new housing supply. Zillow notes that 2026 looks like it will have the fewest housing starts since before the pandemic.
Don’t expect fireworks in most real estate markets in 2026. “It’s a rebalancing after a period of unsustainable growth,” adds Khaykin.
Even so, the shift toward a buyers’ market in single-family homes and a balanced multifamily market offers plenty of opportunities for investors.
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How I’m Investing in Real Estate in 2026
I plan to continue investing similarly to my investment strategy in 2025, as I see the same trends driving the market.
Stable, high-income multifamily
I will continue to invest in real estate every month as a small-dollar investor through a co-investing club. We meet on a Zoom call every month, vet a new investment together, and any member can invest with $5,000 or more.
We’ve seen success with Midwestern multifamily properties with strong, predictable cash flow over the last two years. These typically pay 8% to 10% in distributions, and we plan to continue investing in these. In many cases, the operator plans to refinance them within three to four years, to return our investment capital even as we keep our ownership interest and continue collecting cash flow.
We also like property tax abatement investments. The operator partners with the local municipality to set aside some or all of the units for affordable housing, in exchange for a partial or full property tax abatement. These come with some recession protection, as the affordable units generally have a wait list and 100% occupancy, and demand only goes up when times are tight.
I wrote recently about how multifamily is one of the few asset classes that is clearly not in a bubble, because it already went through its bubble three years ago. It’s hard to say the same for stocks, gold, and many other kinds of investments right now.
Land
We’ve also had great experiences with land investments. The short turnaround for land flips allows operators to shift their buy pricing down quickly when prices dip.
As for recession risk, we plan to invest again with an operator we like who installs manufactured homes on land parcels and sells them to first-time homebuyers for half the local median price. Even in a recession, there will always be demand for half-priced homes.
Conservative industrial seller-leaseback
Finally, we’ve had success with conservative industrial seller-leaseback investments. These work best when the single industrial tenant has a long history of success, and could be replaced with another tenant paying higher rent per square foot if they default.
For example, we invested in one not long ago where the tenant had an order backlog over three years long. Their clients include the U.S. Navy. They’re not going anywhere.
Other diverse real estate investments
Over the years, I’ve invested in dozens of states and cities, with dozens of operators, in virtually every asset class.
What I Look For
I don’t have a crystal ball, and I don’t know what the next hot asset class will be, or the next hot market. I gave up the prediction game a long time ago.
Today, I keep an open mind and simply look for asymmetric returns. I look for experienced, established operators who have invested through several market cycles, and deals that have some kind of extra downside risk protection.
You can sit on the sidelines and watch your money lose value to inflation. Or you can join a co-investing club to assess risk alongside a community of other investors, and invest smaller amounts. I choose the latter.
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