Home values are edging down as buyers remain spooked by high mortgage rates, according to a new report.

The typical value of a home in the U.S. fell 0.3% in August, from the previous month, according to real-estate company Zillow’s August market report. That’s the largest monthly drop since 2011, the company said.

Zillow cited “the historic rise in home prices over the pandemic, compounded by this year’s spiking mortgage rates.”

Though home price appreciation has slowed since it peaked in April, home values are still up 14.1% from a year ago. They’re up nearly 44% from August 2019 before the pandemic.

Mortgage rates have surpassed 6%, making people’s monthly payments more expensive. With homes still being too expensive for many people to buy, would-be home owners remain on the sidelines.

“The prime suspect to explain the pullback in homebuyer demand is the huge decline in affordability over the past year. The diverging fortunes of more and less affordable markets backs up the hypothesis,” Zillow said.

“More affordable markets in the Midwest are generally retaining their heat while competition is cooling most rapidly in Western markets, especially those with the highest home prices and the ones that saw the most home price appreciation over the pandemic.”

Home values fell the most in San Francisco, by 3.4%, followed by Los Angeles, by 3.4%, Sacramento, 3.2%, and Salt Lake City.

Home values rose in a few markets, such as Birmingham, Indianapolis, Cincinnati, and Louisville. Homes in these areas are typically priced at under $300,000.

With people hesitant to buy homes, the typical time a listing spends on the market is increasing slightly: In August, a listing goes pending 16 days after first going active on Zillow. That’s 3 days longer than it spent on the market in July.

Inventory is crawling up, rising by 1% from July.

“Typical mortgage payments show an even starker picture of the astronomical growth of expenses for new homeowners over the past three years,” Zillow said.

The typical monthly mortgage payment for a new home has jumped from $897 in August 2019 to $1,643 this year — an 83% increase. That’s an “astronomical growth of expenses for new homeowners over the past three years,” Zillow said.

For the buyer, affordability has seriously worsened. In April 2021 when rates were at 3%, the annual income needed to buy a home at median price at $340,700 was $79,600, researchers at the Harvard Joint Center for Housing Studies said on Friday.

With rates at 5.41% in July, the annual income needed to buy a median-priced home at $403,800 was $115,000, they said.

(Emma Ockerman contributed to this report.)

Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at aarthi@marketwatch.com