As more inventory of for-sale homes helped slow previously high rates of appreciation, from December to January, national home values saw the smallest monthly increase since May 2012, according to the January Zillow Real Estate Market Reports.

National home values rose just 0.2% to a Zillow Home Value Index of $169,600.

Nationwide, while inventory remains tight, the number of homes listed for sale on Zillow was up 11.1% annually in January on a seasonally adjusted basis – the fifth straight month of rising year-over-year inventory.

Inventory rose year-over-year in 22 of the nation’s 35 largest metro areas covered by Zillow, with the largest inventory gains coming in some of the areas that were hit hardest by the housing recession, including Las Vegas (up 42.8%); Phoenix (up 30.5%); and Sacramento, Calif. (up 26%).

Those metros also experienced significant cooling in the pace of home value appreciation in January, Zillow notes, as buyers had more homes to choose from and were less apt to engage in the kinds of bidding wars that helped drive prices up so quickly last year.

“Last year, tight inventory contributed to very rapid home value appreciation. Now, more inventory is helping to moderate home value increases in many areas,” comments Stan Humphries, chief economist for Zillow.

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