Highlights:
- A recent report reveals that 90% of major US metropolitan areas are experiencing overvalued homes, with Southern states leading the charge.
- Tennessee, Arkansas, and South Carolina top the list of states with the most significant increase in overvalued homes.
- The national average home price reaches $381,400, with mortgage rates hovering around 7.09%.
Housing Market Faces Overvaluation Crisis
A staggering 90% of major US metropolitan areas are grappling with overvalued homes, according to a recent report. This widespread issue is particularly pronounced in Southern states, where housing prices have skyrocketed in recent years.
Top 5 States with Overvalued Homes
| State | Annual change in home prices | Median sales price in March 2024 |
| Tennessee | 6.2% | $378,600 |
| Arkansas | 5.9% | $248,900 |
| South Carolina | 9.4% | $370,100 |
| Montana | 3.8% | $535,000 |
| Alabama | 4.3% | $272,700 |
Metro Areas Most Affected
The report also highlights the top 5 metropolitan areas with the most significant overvaluation:
| Metro area | Annual change in home prices | Median sales price in March 2024 |
| Memphis, Tenn. | -1.3% | $172,000 |
| Buffalo-Cheektowaga-Niagara Falls, N.Y. | 4.5% | $177,500 |
| Indianapolis-Carmel-Anderson, Ind. | 6.2% | $240,000 |
| Milwaukee-Waukesha-West Allis, Wis. | 5.9% | $185,000 |
| Nashville-Davidson-Murfreesboro-Franklin, Tenn. | 1.1% | $474,990 |
Homeownership Becomes Increasingly Unaffordable
The combination of high mortgage rates and skyrocketing home prices has made homeownership an unattainable dream for many Americans. To afford a median-priced home, buyers need to earn over $100,000 annually, a daunting task for many.
Housing Market Predictions
Experts predict a slowdown in home-price growth, from 5.5% in 2023 to 3% or even 0% in 2024. As the housing market continues to grapple with high mortgage rates and overvaluation, buyers and sellers alike must adapt to the new normal.
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