Regions where home values are anticipated to rise the most in the upcoming year
During the pandemic period, with interest rates hitting unprecedented lows, home values soared—often resulting in extremely competitive environments for first-time property purchasers. As the Federal Reserve attempted to combat inflation in 2022 by raising interest rates, prices generally stabilized. Recently, however, the Fed has started to lower rates with a 50 basis point cut in September. Despite declining inflation and interest rates, statistics indicate that home values in certain areas may keep rising over the next year.
With this in consideration, SmartAsset evaluated 2,000 of the largest U.S. zip codes based on the expected average dollar growth in home values from August 2024 to August 2025.
Key Insights
- Home values in these neighborhoods of Orange County, California, are expected to rise the most. Leading the ranking, the 92618 area of Irvine is anticipated to experience an average home value increase of $32,456—a 2% rise over the current average price of $1.62 million. The 92620 district in Irvine is predicted to display the second highest increase at $28,957. Additionally, 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 feature in the top 10. Over the last year, neighborhoods 92618 and 92620 witnessed average home value increases exceeding 20%.
- These two zip codes in New Jersey and Tennessee show the highest anticipated percentage growth in home values. The 08234 area of Egg Harbor Township, New Jersey, along with the 37920 area of Knoxville, Tennessee, are projected to achieve a 4.5% rise in average home values through August 2025. This would correspond to a $17,225 increase from the August 2024 average home value of $382,765, and a $13,867 increase on the average home value of $308,123, respectively.
- In several neighborhoods of the San Francisco metro area, prices could drop by as much as $100,000. Forecasted price reductions are generally between -3% and -4% over the next year, with three neighborhoods in San Mateo County expected to see the largest dollar decreases: In Hillsborough, 94010, this decline would translate to -$102,109. In the 94025 area of Menlo Park, predictions indicate an average drop of $81,020. In the 94303 neighborhood of East Palo Alto, it could decline by -$74,856.
Home values in these three neighborhoods are projected to fall by more than 5%. The 88240 neighborhood in Hobbs, New Mexico, is anticipated to experience the steepest percentage decline in average home values at -7.4%, representing a $12,054 drop on the average $162,908 home price. The 70301 area of Thibodaux, Louisiana, is forecasted to have a -5.6% price reduction, or -$12,117. The third-largest projected decrease is in the 77705 district of Beaumont, Texas, with a -5.5% drop, or -$6,173.
Top 10 Locations with the Highest Estimated Dollar Increase in Home Values
Neighborhoods are listed based on the anticipated dollar growth in property values from August 2024 to August 2025.
- 92618: Irvine, CA
- Estimated dollar increase in home values: $32,456
- Estimated percentage increase in home values: 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
- Estimated dollar increase in home values: $28,957
- Estimated percentage increase in home values: 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
- Estimated dollar increase in home values: $25,806
- Estimated percentage increase in home values: 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
- Estimated dollar increase in home values: $24,461
- Estimated percentage increase in home values: 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
- Estimated dollar increase in home values: $22,730
- Estimated percentage increase in home values: 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
- Estimated dollar increase in home values: $22,146
- Estimated percentage increase in home values: 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
- Estimated dollar increase in home values: $21,321
- Estimated percentage increase in home values: 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
- Estimated dollar increase in home values: $21,053
- Estimated percentage increase in home values: 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
- Estimated dollar increase in home values: $20,516
- Estimated percentage increase in home values: 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
- Estimated dollar increase in home values: $20,051
- Estimated percentage increase in home values: 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 Approach
Cities were ordered according to the largest 12-month forecast using Zillow’s Home Value Forecast (ZHVF) metric for all types of properties (single-family residences, condos, and co-ops) in the top 2,000 zip codes ranked by size. Value change projections are based on estimates as of Aug. 31, 2024, for the period ending Aug. 31, 2025. The predictions were applied to the August 2024 home value figures for every zip code to derive the anticipated average home value increase.
This article was produced by SmartAsset and scrutinized and disseminated by Stacker.
By Jaclyn DeJohn, CFP
