Home prices rose in July but at a slower rate, as the real estate market's rebound continues to cool off.

National home prices were up 5.6% annually, down from a 6.3% gain in June according to the S&P/Case-Shiller index. The pace of price gains has slowed for seven straight months.

But Stan Humphries, Zillow's chief economist says the slower pace of growth may be healthier for the market than the double-digit price gains recorded last year.

He adds the current price gains are being fed by wage growth, an improving job market and young adults moving out of their parents homes.