Zillow: U.S. Home Values Fall In October, But Boston Bucks The TrendNational home values fell for the second month in a row in October according to a new report from real estate portal Zillow. U.S. prices fell to $162,800 in October from $162,900 in September, a decline of 0.1 percent, according to Zillow's Home Value Index. The last time home prices fell two months in a row was October 2011.
Prices were still up compared with the same time last year, rising 5.2 percent compared with October 2012. That's a much slower pace than annual appreciation rates in the seven percent range experienced over the summer, further proof that the national market has begun to cool off after months of unsustainable appreciation rates, according to Zillow.
Boston, however, was an exception to the national trend, with prices rising 0.5 percent to $343,800 in October from $342,100 in September, and up 9.3 percent from October 2012.
Zillow predicts that national home values will rise just 2.7 percent over the next 12 months, roughly half the current pace. Seven of the top 30 metros covered by Zillow are expected to see home values fall over the next year, with the biggest declines in St. Louis (-1.5 percent), Philadelphia (-0.9 percent) and New York (-0.7 percent).
"The months-long period of annual home value appreciation rates in the 6 and 7 percent range was great while it lasted, but we knew it would not continue indefinitely. The slowdown we've seen these past few months was expected, and is largely welcome news for a market still struggling to find its natural balance," Zillow Chief Economist Stan Humphries said in a statement. "The conditions that led to the robust appreciation experienced earlier this year, including historically low mortgage interest rates, high affordability, low inventory and high demand, are waning. In their place, we're beginning to see more inventory and rising mortgage rates, which will lead to further normalization in the market going forward."
The number of completed foreclosures in October fell to 5.44 homes foreclosed out of every 10,000 homes nationwide, down from 5.5 homes in September. Foreclosure re-sales represented 8.7 percent of homes sold in the U.S. in October, up 0.5 percentage points from September but down 2.1 percentage points from October 2012.