Home values fell in the US in July for a seventh month in a row
Home value appreciation in the United States has slowed each month this year, seven in a row, and is at its lowest level since 2015, according to the latest real estate index.
The typical home is now worth $229,000, up 5.2% from a year ago but this is the smallest annual appreciation since October 2015, according to the figures from real estate firm Zillow.
Last year at this time, home values rose 7.7% year on year. But home values are up 0.3% month on month, and the index report says that this is an indication that values are stabilizing after a period of relatively extreme growth rather than headed for a sustained downturn.
Among the 50 largest markets, home values have grown the most in Salt Lake City with a rise of 9.4% since July 2018, followed by Indianapolis up 8.1% and Charlotte up 7.3%, although growth is slowing in each of these metros.
Only New Orleans, Birmingham and Oklahoma City saw home values appreciate at a greater rate than a year ago, the index also shows.
Home values have fallen year on year in California’s San Francisco Bay Area, home to the two most expensive markets in the country. The value of the typical home fell 10.5% in San Jose and 1.1% in San Francisco. A year ago, home values were growing 24% annually in San Jose, a 34.5% difference.
‘As talk builds of a potential recession in the next year or two, housing remains fairly stalwart. The slowing appreciation is ultimately a good sign that the market is adjusting in response to the growing unaffordability of down payments, while low mortgage rates are keeping those with the required savings interested despite softer growth,’ said Skylar Olsen, director of economic research at Zillow.
‘The uptick in the rate of homes coming onto the market, a good and true increase in supply, should be a boon to those inventory starved home buyers still searching near the close of home shopping season. While buyers are catching a break, renters have seen prices continue their steady upward climb, presenting yet another obstacle in the quest to save for that down payment,’ Olsen added.
The figures show that the median rent rose 1.9% year on year to $1,59e. For an eighth consecutive month, rents rose the most in Phoenix with a rise of 6.1% from a year ago, followed by Las Vegas up 5.9%. Rents fell in only three of the 50 largest markets, Houston, Buffalo and Baltimore.
Inventory grew 1.3% annually, reversing four straight months of declines. There are 19,978 more homes for sale than this time last year. New listings drove the inventory growth in July, up 5.7% from a year ago.