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Zillow’s May 2019 market report shows a mix of slowing home value growth and accelerating rent growth, signaling a normalizing market.

The U.S. median home value rose 5.4% year-over-year in May, to a Zillow Home Value Index of $226,800, according to the May Zillow Real Estate Market Report. May’s annual growth rate is still well above the historic average pace of annual ZHVI growth of 3.8 percent in a given month, but represents a notable slowdown from both the May 2018 rate of 7.5% and the recent high of 8.1% set in December 2018. After a brief acceleration during the last four months of 2018, annual ZHVI growth has slowed compared to the month prior in each of the first five months of 2019.

While home value growth has slowed, rent prices are accelerating. The U.S. Zillow Rent Index rose 2.7% in May, to $1,479/month. After slowing throughout much of 2018, the annual pace of rent growth has accelerated in each of the first five months of 2019 compared to the month prior. Rent was up compared to May 2018 in all 35 of the nation’s largest housing markets, and annual rent growth is currently faster than a year ago in 28 of those 35.

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