The brakes are on growing home prices, with appreciation at 6.7 percent—the lowest rate since November 2016, according to the January Zillow® Real Estate Market Report. Appreciation hit 7.6 percent in May 2017 but tempered through the year.
The deceleration could give homebuyers hope this spring, says Aaron Terrazas, senior economist at Zillow.
“Home values are still growing very quickly relative to historic norms,” Terrazas says. “After years of intense competition, some buyers may be more willing than previously to take more time with the process and to wait until the right home at the right price comes on the market, even if it’s not for several months. Removing a lot of this frenzy, especially as inventory remains incredibly tight, may prove to be good news for beleaguered buyers.”
The median, nationally, is $207,600, with 10 percent fewer inventory than in January of last year, the report shows.
“The pace of home value appreciation we experienced during much of last year was not sustainable, and a slow glide path down to a more normal appreciation rate has been expected for some time,” says Terrazas. “This slowdown is nothing to be overly concerned with—demand from homebuyers remains very high, and inventory remains tight. New-home construction is growing, providing some relief to buyers who can afford the generally high price point of new homes.”