The FHFA also reported that the seasonally adjusted monthly index for June increased 0.2 percent from May.
In addition, the seasonally adjusted, purchase-only HPI increased 5.4 percent from the second quarter of 2014 to the second quarter of 2015, while prices of other goods and services dropped 1.4 percent. Thus, the inflation-adjusted price of homes rose approximately 6.9 percent over the latest year.
“Home price growth in the second quarter once again far exceeded the pace of overall inflation, even as mortgage rates drifted upwards,” said Andrew Leventis, FHFA's principal economist. “Although too early to tell whether it’s a sign of a slowdown, the monthly appreciation rate in June was more modest than we have seen in a while.”
According to the FHFA, home prices increased in every state between the second quarter of 2014 and the second quarter of 2015. Among the top five areas in annual appreciation were Colorado (10.6 percent); Nevada (10.5 percent); Florida (9.7 percent); Hawaii (9.5 percent); and Washington (8.8 percent).
Slowing home values could provide more opportunities for hopeful buyers who have been waiting on the sidelines for the market to cool off.
Zillow credits the housing market's shift to slower pace as the cause for the decline in home values since the market began recovering almost four years ago.
"This slight dip in home values is a sign of the times," said Svenja Gudell, Zillow's chief economist. "Many people didn't think it was happening, but it is: we're going negative. We've been expecting to see a monthly decline as markets return to normal. However, this is not like the bubble bust. We're not going to see 10 percent declines. The market is leveling off, and it's good news, particularly for buyers, because it will ease some of the competitive pressure."
According to the report, homes lost 0.1 percent of their value nationally in July, falling to $179,900. Annually, homes appreciated 3 percent, down from 3.4 percent in June. Meanwhile, rents continue to grow at a rapid pace, up 4.2 percent from last July to $1,376.
"Slowing home values could provide more opportunities for hopeful buyers who have been waiting on the sidelines for the market to cool off," the report said. "More homes may be coming online as homeowners who have been watching strong home value growth decide to list their houses as appreciation slows and smaller gains are expected. This could help ease the constrained inventory the market has been facing for the past several months."