US Housing Market Experiences Widespread Overvaluation

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.