Core Insights - Zillow economists project a modest increase in U.S. home prices, forecasting a rise of +1.2% from August 2025 to August 2026, with an updated outlook now at +1.9% [2][4]. Summary by Sections Home Price Forecast - Initially, Zillow's 12-month forecast for U.S. home prices was +2.6%, but due to a quicker-than-expected softening in housing markets, it was revised down to -1.7% by April 2025 [3]. - Recent months have seen a halt in downward revisions, with forecasts increasing from +0.4% in August to +1.2% in September, and now to +1.9% [4]. Regional Price Changes - Among the 300 largest U.S. metro areas, the highest projected home price increases from September 2025 to September 2026 are expected in: 1. Atlantic City, NJ +5.4% 2. Rockford, IL +5.1% 3. Concord, NH +5.1% 4. Knoxville, TN +5.0% 5. Saginaw, MI +4.9% [6]. Declining Markets - Conversely, the largest expected home price declines in the same period are projected in: 1. Houma, LA -7.4% 2. Lake Charles, LA -6.9% 3. Lafayette, LA -4.3% 4. New Orleans, LA -4.0% 5. Shreveport, LA -3.8% [12]. Market Dynamics - Currently, U.S. home prices are up +0.01% year over year, and if Zillow's latest forecast of +1.9% is realized, it would indicate a slight acceleration in national home price growth [7]. - The Sun Belt, particularly Southwest Florida, is identified as the epicenter of housing market weakness, with a notable increase in buyer's markets from 6 to 15 among the nation's largest metros [9].

Core Insights - The article discusses the impact of renewed S&P 500 volatility due to tariff talks and a government shutdown, leading investors to rely on secondary economic indicators for insights into the U.S. economy [1] NFIB Small Business Survey - The NFIB Small Business Optimism Index fell by 2.0 points to 98.8 in September, marking the first decline in three months and coming in below the forecast of 100.6 [2] - Uncertainty among small business owners surged, reaching the fourth-highest level in over 51 years, despite the index remaining above its historical average for five consecutive months [2][3] - Labor quality and taxes are the top concerns for small business owners, with significant issues arising from supply chain disruptions and inflation [3] - The net percentage of owners reporting higher profits increased to its highest level in nearly four years, highlighting the sector's influence on the overall economy [3] Regional Manufacturing: Philadelphia & New York - The Philadelphia Fed Manufacturing Index dropped 36 points to -12.8, the lowest since April and below the forecast of 8.6, indicating a sharp slowdown in regional activity [4] - Conversely, the Empire State Manufacturing Survey for New York increased by 19.4 points to 10.7, exceeding the forecast of -1.8, suggesting a rebound in manufacturing activity [4] - Both regions reported elevated price pressures and stronger future optimism, with firms expressing greater confidence in the next six months [4][5] NAHB Housing Market Index - Builder confidence improved, with the NAHB Housing Market Index rising five points to 37, the highest since April and above the expected reading of 33 [6] - All three components of the index—current sales, expected sales, and prospective buyer traffic—experienced their largest monthly increases since early 2024 [7] Zillow Home Value Index - U.S. home values rose for the first time in seven months in September, with the Zillow Home Value Index increasing to $363,932, a nominal rise of 0.1% from August [8] - However, inflation-adjusted home values fell for the seventeenth consecutive month, declining 0.3% from August and down 3.8% year-over-year, indicating a challenging housing market [9] Market Reactions - The S&P 500 posted a 1.7% increase last week, with the SPDR S&P 500 ETF Trust (SPY) also rising by 1.7% [10] - The 10-year note yield fell below 4.00% for the first time in over a year, while the 2-year note reached its lowest level since September 2022 [11] Economic Data in the Week Ahead - The ongoing government shutdown has led to a sparse economic calendar, making the available reports more significant [12] - Upcoming releases include Existing Home Sales figures, the Kansas City Fed Manufacturing Index, and the Michigan Consumer Sentiment report, which will provide insights into consumer sentiment and economic growth [12]