This story was originally published in Builder.
Entry-level home values are growing at their slowest pace since mid-2016, according to RealEstate.com's Entry-Level Market Report. At the same time, inventory is showing consistent positive growth.
The typical entry-level home is worth $130,200, up 9.2% from a year ago. This is the slowest pace of annual appreciation on record since June 2016. Last February, entry-level homes were gaining value at a 12.5% annual pace. Forty-two of the 50 largest U.S. metros saw slower entry-level home value appreciation compared with a year ago.
Jacksonville and Tampa, Florida saw the biggest declines in appreciation, with each slowing by more than 16 percentage points from breakneck paces of more than 25% a year earlier, but both markets are still appreciating faster than the national average.
The number of entry-level homes on the market is also on the rise, which may be contributing to the slowing pace of appreciation. Entry-level inventory rose 4.1% over the past year, marking the seventh straight month of growing inventory – a sign that this is a real shift in the market, rather than a temporary change. Prior to this growth, the number of entry-level homes for sale had fallen on a year-over-year basis for nearly four years.
Salt Lake City and San Jose saw the biggest increases in entry-level inventory, up 67.2% and 60.1%, respectively.
"Buying a home for the first time is an incredibly exciting yet extremely stressful time," said RealEstate.com general manager Justin LaJoie. "Potential buyers who tested the waters in recent years should have an easier time now, which should be especially good news for anyone who made an offer but lost their bid for a home. First-time buyers can give themselves an extra boost by being well-informed, prepared buyers. And the work they do – contacting more agents, doing more research and visiting open houses – should pay off this year."
Zillow Group designed the RealEstate.com search experience to give first-time buyers more transparency and a better understanding throughout the home search process.
This story was originally published in Builder.
