Slowing home value gains to contribute to 'more balanced market'

Home value gains slowed in November and are likely to continue to slide until reaching a moderate pace more characteristic of a balanced market, Zillow reported.

Home values increased 0.6 percent month over month in November and 7.1 percent on an annual basis, according to the listing portal. The pace of year-over-year home value appreciation peaked during the summer at 7.3 percent and since then has gradually declined, Zillow noted.

Zillow forecast that values will increase 4.6 percent for the 12-month period from November 2013 to November 2014, thanks to “moderating influences, including rising mortgage interest rates, flagging investor demand and slowly increasing for-sale inventory,” said the listing portal’s chief economist, Stan Humphries.

He added: “This slowdown in home value appreciation will contribute to a more balanced market and will help to ease some emerging affordability problems in a handful of very hot markets, particularly in California.”

Source: Zillow