After two years of consistent growth, U.S. home prices have begun to level out. National home prices actually fell by less than 1% between the first quarter and the second quarter of 2014 after more than two years of steady increases, according to the latest quarterly index report from Fitch Ratings.

“The cooling of the US housing market comes as no surprise after several years of unsustainable growth rates,” said Fitch Director Sean Nelson. “It’s also worth noting that nearly all major cities are experiencing the same home price flattening at the same time. “

Fitch reports that most of the nation’s metro areas that experienced large home price increases since 2011 saw home price growth “slow, stall or reverse” in the first six months of 2014.

“While the magnitude of the decline is benign, the relatively flat prices are in stark contrast to recent price gains,” Fitch said in the report. Between 4Q11 and 1Q14, home prices increased roughly 20% nationally, Fitch said.

“While home price growth has slowed or stopped in most regions, several markets, many of which are in California and Texas, are still overvalued,” Nelson said.

“Despite recent positive figures, Fitch believes home prices in certain regions remain above sustainable levels and are at risk for potential declines,” Fitch said in the report. “According to Fitch’s analysis, the recent rate of price increases is not entirely supported by the underlying economic fundamentals in some areas.”

Fitch’s data on the slowing pace of home price growth reinforces a CoreLogic report from earlier in October, which showed that home prices, including distressed sales, climbed 6.4% in August 2014 compared to a year prior. That figure is slightly down from July’s 7.4% year-over-year increase and 1.2% month-over-month increase.

"The pace of year-over-year appreciation continues to slow down as real estate markets find more balance. Home price appreciation reached a peak of almost 12 percent year-over-year in October 2013 and has since subsided to the current pace of 6 percent," said Mark Fleming, chief economist at CoreLogic.

"Continued moderation of home price appreciation is a welcomed sign of more balanced real estate markets and less pressure on affordability for potential home buyers in the near future," he added. 

Fitch’s data on overvalued markets in California and Texas also echoes another report from CoreLogic, published Monday, which showed that there are currently four overvalued markets of the top 50 in CoreLogic’s list of Market Condition Indicators.

At the top of that list are two metro areas in Texas, Austin and Houston, where an oil and gas boom has fueled job growth and population growth, pushing home prices well above their sustainable levels.

Home prices in these two markets are also well above their historical peak levels: 22.8% for Austin and 16.2% for Houston.

The other two overvalued metros are Miami, Fla. and Washington, D.C. As home prices rose significantly since 2013, homes have become less affordable in these two markets, and, therefore, home prices less sustainable.