A report released Thursday by Zillow [1] shows national home values rose just 0.2 percent in January from December. Inventory rose in 22 of the nation’s 35 largest metros, explaining some of the slowdown in home value gains.
The Zillow Home Value Index [2], which, according to the report, "measures the median estimated home value for a given geographic area on a given day and includes the value of all single-family residences, condominiums, and cooperatives," notes that January's figure of $169,600 marks the smallest monthly increase since May 2012.
Year-over-year, home values rose 6.3 percent in January, down from previous gains of 7.1 percent as recently as August 2013. Home values are expected to rise another 3.4 percent to $175,301 in the next 12 months.
Large metro areas expected to show the most appreciation over the next year include Riverside (13.3 percent), Orlando (10.3 percent), and Sacramento (9 percent).
Although inventory remains tight, the number of homes listed for sale on Zillow rose 11.1 percent annually in January.
States that were hit the hardest from the housing recession showed some of the largest increases in home inventory; cities like Las Vegas (up 42.8 percent), Phoenix (up 30.5 percent), and Sacramento (up 26 percent) all showed large gains.
Home appreciation slowed in January for these metros as more available homes allowed buyers to stay away from bidding wars that drove up home prices.
Last year, a smaller inventory of homes contributed to a rise in home values, but increased inventory is having a moderating effect. Dr. Stan Humphries, Zillow chief economist, said that the increased supply is available because "more sellers are free to list their homes after being released from negative equity, builders continue to ramp up construction and many homeowners decide to list their homes and capitalize on recent gains."