Home values grew at the slowest pace in 18 months in February as competition among buyers eased with more listings hitting the market, according to a report released by Zillow (Z, ZG) on Monday.

The typical US home value climbed 2.1% year over year to $357,377, marking the lowest rate for any February since 2012. That compares with a 2.6% annual rise the month prior.

Home values climbed year over year in 37 of the 50 largest metro areas in February, led by San Jose, while 11 saw declines, driven by Austin.

Inventory, or the number of listings active, rose 15% annually and 1.4% sequentially, the real estate marketplace said.

Home buying and selling activity remained somewhat muted in February, but that could change with mortgage rates in March hitting the lowest levels since December, according to the report.

"Affordability continues to present a challenge for those who have been waiting to buy a home, but the lower rates we've seen so far in March are steadily slicing off portions of monthly mortgage payments," Zillow said. "That, combined with flatter home value growth and wage growth that outpaces rent growth means that some long-time savers are likely catching up to a down payment that may have felt out-of-grasp for years."

However, the prevailing economic uncertainty could be a drag on housing activity, the report said.

"Economic uncertainty is a counterbalance, one that will be felt in some areas of the country more than others," Zillow Chief Economist Skylar Olsen said. "People tend to shelter in place when the future of their job or industry is uncertain."