Us house prices see first dip in four years

Photo credit: Michael Patrick

US house prices declined for the first time in almost four years in July 2015.

New figures from Zillow suggest that the US housing market is now slowing down, with property values declining 0.1 per cent in July month-on-month. Prices rose 3 per cent on an annual basis, down from 3.4 per cent in June.

Of the 517 metros covered by Zillow, 204 saw a slowdown, including major metros like Washington, DC and Cincinnati, where home values declined month-over-month in July. The slowing appreciation is a sign that the market is returning to normal, says Zillow, with economists expecting to see growth flatten out as the recovery continues.

Indeed, even hot markets like Denver, Dallas, San Jose and San Francisco, which recorded double-digit annual home value growth in July, saw their monthly appreciation rates ease from June.

"This slight dip in home values is a sign of the times. Many people didn't think it was happening, but it is: we're going negative," says Zillow Chief Economist Svenja Gudell.

"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 per cent declines. The market is leveling off, and it's good news, particularly for buyers, because it will ease some of the competitive pressure."

Slowing home values could provide more opportunities for hopeful buyers who have been waiting on the sidelines for the market to cool off, adds the site. Meanwhile, rents continue to grow at a rapid pace, up 4.2 per cent from last July to a Zillow Rent Index of $1,376. With no sign of rents slowing down, could conditions finally be right for buyers to get their feet on the property ladder?