A Letter from Nicole:
What Zillow's 2027 Housing Forecast Means for Us

The economy is shifting. The housing market is adjusting. And the opportunities ahead may look different than what we've grown accustomed to.

October 2026 | Nicole Hartenbach, InTown Partners Real Estate Group

I'm writing this from the Zillow conference, where I just had the opportunity to hear Zillow's Chief Economist, Mischa Fisher, share his outlook for the economy and housing market heading into 2027.

If there's one thing I've learned over the years in real estate, it's that understanding the market is about much more than watching interest rates or tracking home prices. It's about understanding the bigger economic picture, recognizing how those changes influence consumer behavior, and knowing how to help our clients make informed decisions.

And right now, there are some important shifts worth paying attention to.

First, Let's Talk About the Economy

One of the most interesting dynamics in today's economy is what's happening in the labor market.

We're seeing a significant slowdown in hiring, but we're not necessarily seeing the widespread layoffs that typically accompany a major economic downturn.

Economists have described this as a low-hire, low-fire environment.

Businesses are being cautious. They're holding onto their existing employees but becoming increasingly hesitant to expand their workforces. September's unemployment rate was reported at 4.2%, which remains relatively low historically, but job creation has slowed considerably.

Why does this matter for real estate?

Because buying a home is one of the largest financial commitments most people will ever make. And while mortgage rates certainly influence affordability, job security and consumer confidence play an equally important role.

A buyer who feels uncertain about their next promotion, their company's hiring outlook, or their ability to find another job may hesitate to make a major purchase, even if they can technically afford it.

That's an important distinction. Not every buyer sitting on the sidelines is waiting for a lower interest rate. Some are waiting to feel more confident about their financial future.

What Zillow Is Forecasting for 2027

The numbers presented today paint a picture of a housing market that is continuing to adjust rather than preparing for a dramatic rebound.

Home values: +2.1% nationally

Zillow is forecasting modest home value appreciation in 2027.

To me, this reinforces something I've been communicating for quite some time: a slower market does not automatically mean a declining market.

We can have fewer transactions, longer marketing periods, and more negotiating room for buyers while still experiencing modest price appreciation.

Of course, national averages don't tell the whole story. Real estate remains incredibly local, and individual neighborhoods, price points, and property types can perform very differently.

Home sales: −0.8% nationally

This was particularly interesting.

Despite some anticipated improvement in mortgage rates, Zillow is forecasting a slight decline in home sales nationally.

That tells us something important: lower rates alone may not be enough to immediately unlock the market.

Affordability remains a challenge. Consumer confidence is fragile. And many homeowners are still reluctant to give up the mortgage rates they secured several years ago.

The result is a market where people continue to move, but often because they have a compelling reason to do so rather than simply because market conditions look attractive.

Mortgage rates: Remaining in the mid-6% range

Zillow's quarterly mortgage rate forecast for 2027 is:

• Q1: 6.77%
• Q2: 6.67%
• Q3: 6.61%
• Q4: 6.53%

The overall expectation is for rates to remain below 7%, but not fall much below the mid-6% range.

For anyone waiting for a return to 3% or 4% mortgages, this is an important reality check.

Could rates move differently? Absolutely. Economic forecasts are educated projections, not guarantees.

But we cannot build our clients' financial decisions, or our business strategies, around the hope that dramatically lower rates are just around the corner.

What This Means for Buyers and Sellers

I actually believe there is opportunity in this environment. But it requires a different approach.

For buyers, a more balanced market can create opportunities that simply didn't exist a few years ago.

More time to evaluate properties. Greater negotiating leverage. Potential seller concessions. And the ability to make thoughtful decisions without the pressure of competing against a dozen offers.

The key is understanding the total financial picture rather than focusing exclusively on the interest rate.

For sellers, expectations and strategy have never been more important.

The days of putting a home on the market at an aspirational price and assuming the market will eventually catch up are largely behind us.

Today's buyers are informed, selective, and sensitive to value.

Presentation matters. Pricing matters. Exposure matters. And the strategy behind a listing matters tremendously.

A home can absolutely sell successfully in this market, but we have to give buyers a compelling reason to choose it over the alternatives.

What This Means for Our Agents

For our team at InTown Partners, my takeaway is straightforward.

The market isn't going to do the work for us. And that's okay.

In a rapidly appreciating market, almost everyone looks like a great real estate agent.

It's in a more challenging market that experience, skill, market knowledge, and genuine client advocacy really begin to separate professionals.

Our clients need us to understand the numbers, explain the economic forces influencing their decisions, and provide thoughtful guidance rather than simply telling them what they want to hear.

They need us to be proactive with our marketing, strategic in our negotiations, and realistic about what it takes to achieve a successful outcome.

They also need us to recognize that every transaction is personal. Behind every statistic is a family, an investment, a relocation, or an important life transition.

And while national forecasts provide valuable context, our responsibility is to translate that information into actionable advice for the neighborhoods and communities we serve here in Huntsville, Madison, and throughout North Alabama.

That's where our local expertise becomes invaluable.

My Biggest Takeaway

I don't believe the next chapter of real estate will be defined by who can wait out the market the longest.

I believe it will be defined by who understands the market well enough to make smart decisions within it.

There will always be people who need to buy and sell homes. Families grow. Careers change. Opportunities arise. Life continues, regardless of what mortgage rates are doing.

Our job is not to predict the market perfectly. It's to help our clients navigate it confidently.

And that's exactly why I believe continuing to invest in education, technology, and the development of our agents is so important.

Markets change. Consumer expectations evolve. The tools available to us become more sophisticated.

But the value of an experienced, knowledgeable, and genuinely committed real estate professional never goes out of style.

As we look toward 2027, I'm approaching the year with both realism and optimism. I don't expect the market to suddenly become easy. But I absolutely believe there will be opportunities for buyers, sellers, and agents who are prepared to recognize them.

And personally, I'd much rather be prepared than surprised.

Warmly,

Nicole Hartenbach
CEO & Qualifying Broker
InTown Partners Real Estate Group
Keller Williams Realty

Luxury is an experience, not a price point.

Market commentary reflects information presented at the October 2026 Zillow conference, supplemented by publicly reported economic data. Zillow's 2027 projections are forecasts, not guarantees. National trends may differ significantly from conditions in individual North Alabama communities.