Zestimate vs. an Index Estimate: Why Two Honest Numbers Disagree

The short answer

A Zestimate tries to price your particular house. An index estimate tells you what your house would be worth if it had tracked its area’s average since you bought it. They answer different questions, so they will usually disagree, and the disagreement is information: it is roughly how much your house has diverged from its neighborhood, plus the error in each method.

What an automated valuation does

Zillow describes the Zestimate on its own page as a model-based estimate built from public records, listing information and comparable sales, and states there that it is not an appraisal. Redfin, Realtor.com and lenders run models of the same family, usually called automated valuation models. They take the characteristics on file for your house (square footage, beds, baths, lot, year built), find recent sales of similar homes nearby, and fit a price. Where a house is listed, the list price and photos feed in too.

That is a real attempt at your house. Its weaknesses follow from its inputs: the records can be wrong or stale, the model cannot see your condition or the renovation you never permitted, and where few similar homes have sold the comparables are thin. Zillow publishes its own accuracy figures for on-market and off-market homes on that page; read them there rather than here, since they change.

What an index estimate does

The index method uses one fact about your house, what you paid, and one federal series, the FHFA House Price Index, which measures how prices of the same homes in your area changed between sales. Value today is purchase price times the ratio of the index now to the index when you bought. There is no model to trust; the arithmetic is on the page. The step-by-step guide walks through it.

Its weakness is the mirror of the Zestimate’s strength. It knows nothing about your house. If you paid a bargain price, the bargain is carried forward. If you added a second story, the estimate did not notice. And the index itself sees only sales with conforming mortgages bought by Fannie Mae or Freddie Mac, so cash, jumbo, FHA and VA sales are not in it (FHFA HPI FAQ).

Where the two numbers come apart

Take a house bought for $310,000 in March 2014 in ZIP 78704, Austin. The index estimate from the ZIP series is $310,000 × 1.95 = $604,811 (2014 to 2025); from the Texas state series it is $310,000 × 2.20 = $682,635 (2014 Q1 to 2026 Q2). Those two differ by $77,823 before any valuation model enters the picture, because a neighborhood and a state are different things measured through different dates. A Zestimate for that address could land above or below either, and the gap between it and the index figure is the sum of:

• How your house has moved relative to its area. Renovations, condition, and a lot that is bigger or smaller than typical. This is the part worth knowing.
• Whether your purchase price was typical. The index method assumes it was.
• The valuation model’s own error on a house it has never seen inside.
• Timing. The ZIP index ends at 2025; a valuation model uses sales from the last few months.

A small gap says your house has tracked its area and both numbers are probably in the right neighborhood. A large gap says at least one method is missing something, and the list above is where to look.

Which one to use

Use the index estimate when you want a number you can check and a baseline for what “keeping pace” would look like. Use an automated valuation when you want a guess at your specific house and are willing to trust the records behind it. Use neither as a sale price: that is set by a buyer, and the only estimate that inspects your house is an appraisal. The home value since purchase calculator gives the index figure for any purchase, with the index values and the level it used shown beside the result.

What this guide does not cover

It does not rate valuation models against each other or report their error rates, and it does not discuss how lenders use them. It tracks areas, not houses; it ignores renovations, condition and lot; its index misses cash, jumbo, FHA and VA sales; and it is not an appraisal.

Sources

• Zillow, What is a Zestimate?
• FHFA HPI frequently asked questions.
• FHFA House Price Index datasets.

This guide is for informational purposes only. It is not an appraisal, and not financial, tax, lending or real-estate advice. Every estimate on this site tracks an area’s average, never a particular house. Confirm anything that matters with a licensed appraiser or your lender.

Last reviewed: September 2026 · Against Zillow's own Zestimate description and the FHFA HPI FAQ.