Zillow’s New 2026 Housing Forecast Is Out—And Knoxville Is One of the Top Rising Markets in the U.S.
Zillow just released its newest 12-month forecast, predicting that home values nationwide will rise 1.5% between October 2025 and October 2026. That may be modest growth, but it’s a major improvement from April’s projection, when Zillow expected home values to decline by 1.7%.
The takeaway? The national market isn’t booming, but it’s stabilizing—and the real story is what’s happening region by region.
Where Home Values Are Expected to Rise the Most
Zillow identified the top five markets projected to see the biggest home-value increases:
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Atlantic City, NJ: +5.3%
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Rockford, IL: +4.8%
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Concord, NH: +4.6%
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Knoxville, TN: +4.3%
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Saginaw, MI: +4.3%
And yes—Knoxville is one of the top-performing markets in the entire country.
Where Prices Are Expected to Decline
On the other end, these markets are projected to see the biggest price drops:
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Houma, LA: -7.8%
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Lake Charles, LA: -7.3%
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New Orleans, LA: -4.7%
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Shreveport, LA: -4.3%
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Lafayette, LA: -4.2%
The difference between rising and falling markets this year is dramatic—far more than what we’ve seen nationally.
Why Knoxville Is Outperforming the U.S. Market
Zillow’s forecast reinforces a theme we’ve seen all year: the national housing market isn’t overheating or correcting—it’s gently rebalancing. The real action is at the local level. And Knoxville is on the winning side of that story.
Here’s why Knoxville stands out:
1. Demand Is Outpacing Supply—Especially in West Knoxville
Areas like Farragut, Hardin Valley, Northshore, Maryville, and the lake communities continue to see limited inventory paired with strong buyer interest. This imbalance is what pushes values up year after year.
2. Knoxville Checks All the Boxes for Relocation
The top-performing markets share three traits:
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A strong university
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A mid-sized, lifestyle-focused environment
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A location in the Southeast
Knoxville hits all three perfectly. The University of Tennessee brings constant demand. Our mid-sized city offers everything people want without the headaches of a major metro. And East Tennessee continues to be one of the most desirable regions in the country.
3. Continued In-Migration Is Fueling Growth
People are still moving here—at record levels. Knoxville has been recognized as one of the top U.S. cities for in-migration, and that steady stream of newcomers is a major driver of price stability and growth.
4. Lifestyle Value Keeps Knoxville Competitive
Buyers want:
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Lakes
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Mountains
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Low taxes
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Great schools
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Access to outdoor recreation
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A strong job market
Knoxville has all of this without the price tag of Nashville, Atlanta, or major coastal cities.
5. A “Fractured Market” Works in Knoxville’s Favor
Nationally, markets with lots of new construction are seeing price slowdowns; markets with tight supply are still climbing. Knoxville leans heavily toward the latter, especially in the most desirable neighborhoods.
What This Means for Buyers and Sellers
For Buyers
Buying into a rising market like Knoxville means you’re purchasing in a place with long-term stability and projected appreciation. Even with rates where they are, you’re gaining value simply by entering a strong market.
For Sellers
A +4.3% projection is a strong signal that Knoxville remains a high-demand, resilient market. Well-priced, move-in-ready homes are still selling quickly—especially in sought-after areas.
For Relocators
If you’re thinking about moving to Knoxville, you’re choosing a market that consistently beats national trends and offers an amazing lifestyle at an accessible price point.
