Where home prices are forecast to increase most in the coming year
With interest rates reaching historic lows during the pandemic era, home prices skyrocketed—often creating highly competitive markets for first-time homebuyers. Prices generally plateaued as the Federal Reserve worked to counter inflation in 2022 by increasing interest rates. Now, the Fed has recently begun decreasing rates with a 50 basis point reduction in September. Despite lower inflation and interest rates, data suggests that home prices in some neighborhoods may continue to go up over the next year.
With this in mind, SmartAsset ranked 2,000 of the largest U.S. zip codes based on the projected average dollar increase in home prices between August 2024 and August 2025.
Key Findings
- Home prices in these Orange County, California, neighborhoods are projected to grow the most. Ranking at the top, the 92618 section of Irvine is projected to see an average home price increase of $32,456—a 2% increase over the current average price of $1.62 million. The 92620 in Irvine is forecast to have the second highest increase at $28,957. Also, neighborhoods in North Tustin (92705, $25,806); Costa Mesa (92626, $22,730); Laguna Niguel (92677, $21,321); Fountain Valley (92708, $21,053); and Mission Viejo (92691, $20,051) also made the top 10. Over the past year, the 92618 and 92620 neighborhoods saw more than 20% increases in the average home value.
- These two zip codes in New Jersey and Tennessee have the highest projected percent growth in home prices. The 08234 section of Egg Harbor Township, New Jersey,, and the 37920 section of Knoxville, Tennessee, are projected to see a 4.5% growth in the average home price through August 2025. This would lead to a $17,225 increase on the August 2024 average home value of $382,765, and a $13,867 increase on the average $308,123 home value, respectively.
- In some San Francisco metro neighborhoods, prices may decline by as much as $100,000. With projected price drops generally between -3% and -4% over the following year, three San Mateo County neighborhoods are projected to see the largest dollar drops: In Hillsborough, 94010, this price drop would equate to -$102,109. In the 94025 section of Menlo Park, projections show an average drop of $81,020. In the 94303 neighborhood of East Palo Alto, it could decrease by -$74,856.
Home prices in these three neighborhoods are forecast to decline by more than 5%. The 88240 neighborhood in Hobbs, New Mexico, is projected to see the highest percent decline in average home prices at -7.4%, or a $12,054 decline on the average $162,908 home price. The 70301 section of Thibodeaux, Louisiana, is forecast to have a -5.6% price drop, or -$12,117. The third-most projected decrease is in the 77705 area of Beaumont, Texas, with a -5.5% drop, or -$6,173.
Top 10 Places With the Highest Projected Dollar Increase in Home Prices
Neighborhoods are ranked based on the projected dollar increase in home values between August 2024 and August 2025.
- 92618: Irvine, CA
- Projected dollar increase in home prices: $32,456
- Projected percentage increase in home prices: 2%
- Average home value as of 8/31/2024: $1,622,752
- Home value increase between August 2023 and August 2024: 21.2%
- 92620: Irvine, CA
- Projected dollar increase in home prices: $28,957
- Projected percentage increase in home prices: 1.7%
- Average home value as of 8/31/2024: $1,703,276
- Home value increase between August 2023 and August 2024: 20.2%
- 92705: North Tustin, CA
- Projected dollar increase in home prices: $25,806
- Projected percentage increase in home prices: 1.7%
- Average home value as of 8/31/2024: $1,517,950
- Home value increase between August 2023 and August 2024: 11.9%
- 37922: Knoxville, TN
- Projected dollar increase in home prices: $24,461
- Projected percentage increase in home prices: 4%
- Average home value as of 8/31/2024: $611,505
- Home value increase between August 2023 and August 2024: 4.7%
- 92626: Costa Mesa, CA
- Projected dollar increase in home prices: $22,730
- Projected percentage increase in home prices: 1.7%
- Average home value as of 8/31/2024: $1,336,992
- Home value increase between August 2023 and August 2024: 10.9%
- 90275: Rancho Palos Verdes, CA
- Projected dollar increase in home prices: $22,146
- Projected percentage increase in home prices: 1.2%
- Average home value as of 8/31/2024: $1,845,432
- Home value increase between August 2023 and August 2024: 3.8%
- 92677: Laguna Niguel, CA
- Projected dollar increase in home prices: $21,321
- Projected percentage increase in home prices: 1.5%
- Average home value as of 8/31/2024: $1,421,303
- Home value increase between August 2023 and August 2024: 13.1%
- 92708: Fountain Valley, CA
- Projected dollar increase in home prices: $21,053
- Projected percentage increase in home prices: 1.6%
- Average home value as of 8/31/2024: $1,315,727
- Home value increase between August 2023 and August 2024: 11.5%
- 93117: Goleta, CA
- Projected dollar increase in home prices: $20,516
- Projected percentage increase in home prices: 1.5%
- Average home value as of 8/31/2024: $1,367,679
- Home value increase between August 2023 and August 2024: 5.8%
- 92691: Mission Viejo, CA
- Projected dollar increase in home prices: $20,051
- Projected percentage increase in home prices: 1.7%
- Average home value as of 8/31/2024: $1,179,422
- Home value increase between August 2023 and August 2024: 13.9%
Data and Methodology
Cities were ranked by the largest 12-month forecast from Zillow’s Home Value Forecast (ZHVF) metric for all homes (single-family residence, condos, and co-ops) in the top 2,000 zip codes by size. Value change projections are as of Aug. 31, 2024, for Aug. 31, 2025. Projections were applied to August 2024 home value data for each zip code to get the projected average home value increase.
This story was produced by SmartAsset and reviewed and distributed by Stacker.
By Jaclyn DeJohn, CFP
