Home prices may finally be stabilizing after five years of free fall, according to a new report by Zillow.com. The average home in America is now valued at $171,500, Zillow found, just .2 percent lower than it was during the previous quarter.
While it’s not exactly great news, the leveling off may provide some solace for homeowners, who have watched their home values plummet 28.8 percent since their peak in June 2006, including a 4.4-percent decline over the last year.
Home affordability is at historic lows courtesy of a large reset in home prices and continued low mortgage rates,” Dr. Stan Humphries, Zillow’s chief economist, said in a press release.
That doesn’t mean everything in the housing market is hunky-dory. Many potential homebuyers are still sitting out, discouraged by high unemployment and general uncertainty about the economy, Humphries said.
“That said, given the steady drumbeat of recent negative economic news, home values held up better than would be expected,” said Humphries.
Given that the rate of decline in home values is softening, Zillow is sticking with its prediction that prices may finally reach their low point in 2012. But on a regional level, some metro areas continue to bleed value. Average home prices dropped another 2.5 percent in Tampa during the third quarter, and 3 percent in Atlanta.
The only ray of truly good news? Two rust-belt cities, Detroit and Pittsburgh, posted minor gains, with home values rising .9 percent and 1.2 percent respectively.
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Image: Diana Parkhouse, via Flickr.com