Zillow, the real estate listing and brokerage website, provides a wealth of publicly available real estate data. Among these, the Zillow Home Value Index (ZHVI) offers a seasonally adjusted measure of home values and market trends. Its "flagship" ZHVI is based on data for "all homes, middle tier, smoothed and seasonally adjusted cut," aiming to represent the typical home value rather than the median. Introduced in 2006, the ZHVI includes various segmentations by geography and housing type. Here, we focus on the flagship ZHVI, which reflects typical home values.
Key Takeaways
- May's ZHVI came in at $368,198, up 0.02% from the previous month and up 0.61% from one year ago.
- After adjusting for inflation, May's ZHVI was down 0.51% month-over-month and down 2.60% year-over-year.
- Today's inflation-adjusted home values are currently 13.26% off their all-time high from July 2022.
Home values fell for the first time in nine months in May, according to the Zillow Home Value Index. Additionally, after adjusting for inflation, real home values dropped even more sharply, remaining at their lowest level in over five years. Last month's ZHVI came in at $370,320, down 0.07% from the previous month and up 0.73% from one year ago. After adjusting for inflation, the real figures are -0.37% month-over-month and -2.50% year-over-year.
Zillow Home Value Index Methodology
Zillow’s ZHVI is measured using monthly changes in its “Zestimates”, its proprietary home valuation model. The index is meant to be timely, comprehensive, and transparent, published three weeks after the close of a given month. Many other home value indexes are published with a significant time lag - like the S&P at Core Logic Case Shiller Index and the FHFA House Price Index.
ZHVI is calculated with a few assumptions:
- Monthly changes are calculated with a weighted mean
- The average Zestimate within a range determines the index level
- It can be interpreted as the market’s total appreciation for a given geography or cut
In addition, historical appreciation is based on actual historical housing stock versus a fixed basket of homes, and home improvements are considered in appreciation unrelated to market movements.
The first chart below shows the flagship ZHVI series - the “typical home value” since 2000, not adjusted for inflation. The current nominal value is 0.07% off its all-time high from April 2025.
Next, we take a look at the same index values but adjust for inflation using the Consumer Price Index. As you can see, it’s a different picture. According to the ZHVI, today’s home values are below that of the (inflation-adjusted) housing peak in 2006 and are currently 13.57% off their all-time high from July 2022.
Here is an overlay of the nominal and real indexes for a comparative look.
Housing Prices (ZHVI) and Mortgage Rates
The following charts overlay mortgage rates with both nominal and real ZHVI, highlighting their relationship. Typically, rising interest rates reduce buyer affordability, decreasing demand for homes. This can lead to downward pressure on home prices. With that said, today’s housing market is following a different path because we’re seeing elevated mortgage rates in conjunction with elevated home prices.
Zillow Home Value Index vs. S&P Cotality Case-Shiller Index
Zillow claims that the ZHVI are “the most accurate and timely measures of residential real estate prices in the United States" and that its index is more representative of housing stock than the S&P Cotality Case-Shiller Index Home Price Index. Zillow claims this due to its extensive database that includes input from real homeowners as well as their sophisticated home valuation model in the Zestimate.
Zillow believes its ZHVI has distinct advantages over the Case-Shiller index. The Case-Shiller (CS) Index uses the repeat-sales methodology, meaning it measures price changes by looking at homes that have resold in a region, while the ZHVI only includes homes that have sold at least twice in recent history and excludes all new construction. Here are a few charts pulled directly from Zillow research comparing the Zillow Home Value Index with the Case-Shiller Index.
Another difference between the CS and ZHVI is that CS includes foreclosure resales. Zillow emphasizes that foreclosure resales are “substantially different from non-distressed sales” and are often considerably discounted from such. Zillow claims that using foreclosure resales represents “two very different market segments”. Eric Stubbs, Ph.D. at RBC WM believes foreclosure sales is a matter of taste and says that foreclosures are actual sales, so they do in fact affect the price of surrounding properties.
In any case, the ZHVI is another tool in the tool belt to determine home values and is useful due to its timeliness and variety of information.
ETFs associated with residential real estate include: iShares Residential and Multisector Real Estate ETF (REZ).
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