In May home values were up 5.4 percent compared with May 2012, which is the second-highest annual rate of national appreciation in the past 12 months, according to Zillow.
Values rose 0.5 percent compared with April, continuing a 19-month trend of slow, steady increases. Even with the general flattening of month-over-month increases, home values are the highest they've been since July 2004.
Zillow predicts home values to rise 4.1 percent by May 2014 to approximately $165,448. The pace of home value appreciation nationwide and in many local markets is expected to moderate as more sellers enter the market, interest rates rise from historic lows and builders begin construction on more new homes, helping ease the supply crunch that has so far contributed heavily to rapid home value appreciation.
"While we believe the housing recovery will remain strong, home value appreciation will slow down, and buyers in it for the short term could get burned if they assume home values will continue rising as they have unabated. A home should always be looked at as a longer-term purchase, which will help cushion homeowners against volatile short-term swings in value," Zillow Chief Economist Stan Humphries said in a statement.
