A typical US home is worth $226,800
US home values inched down for the second consecutive month, signaling a return to a normal pace in appreciation.
The average US home value, which is now worth $226,800, dropped 0.1% from April. Home values also declined in April – ending a streak of 85 straight months of gains that brought $78,500 in value to the median home.
Home values tumbled in 32 of the 35 biggest markets in the US. Values rose in St. Louis and Phoenix and held steady in Riverside, Calif.
"Stepping back to think about housing over the long haul, the current slowdown in home value appreciation is expected and comforting," said Skylar Olsen, director of economic research at Zillow. "While the slowdown has been arguably abrupt, the soft declines over the past two months should not cause too much alarm.”
Year-over-year appreciation has also slowed in each of the last five months, dwindling to a 5.4% growth in May.
“The aggressive pace of home values over the past several years was known to be unsustainable. Buyers simply couldn't afford it, so prices are correcting,” Olsen said. “The expectation here is that we are steadily returning to normalcy—something US housing hasn't seen in two decades—and that will mean continued, but ever more moderate, volatility. The significant drop in mortgage rates, as well as renewed rent growth, may help return US housing values to positive appreciation earlier than otherwise."
