- Home prices in the United States have not yet begun to slow, despite rising mortgage rates.
- Two Florida-based economists expect the market to eventually settle, but it remains overrated.
- According to the Home Price Index, these 13 major cities still appear to be significantly overvalued.
Home prices haven’t slowed yet, according to economists investigating the largest cities in the United States.
Some analysts say that rising mortgage rates are Potentially overheated market..
“There are many reports that mortgage applications and mortgage applications are declining as interest rates rise,” Johnson said. “But so far, prices have continued to rise in the majority of markets.”
Johnson Bellacha and Johnson Housing Market RankingsAn indicator of whether the top 100 US housing markets are overvalued or undervalued.
Approaching the peak
Today, many real estate investors are focusing on the timing of the top of the current market cycle.
Johnson said prices are still rising, but the US housing market seems to be nearing its peak.He expects higher mortgage rates and potential
Drive the final deceleration.
“We expect prices to eventually level off, especially if there is a recession and lending rates remain high,” he said. “Evidence continues to suggest that we are approaching the peak of the current housing cycle.”
According to Johnson, it’s not time to start getting real estate enthusiastically. He warned that investors buying now may find themselves stuck in overvalued homes throughout the long recession.
“People who buy homes in today’s most overrated markets need to stay there for at least a few years and be prepared to survive the rise in prices,” Johnson said.
However, while Boise still appears to be overvalued by about 71%, it was the only home market in the top 100 in the United States where home prices have fallen in the past month.
Austin, Texas could soon occupy Boise’s position as the most overrated city in the United States, according to Eli Bellacha, an economist at Florida International University’s Holo Real Estate School, who developed the Housing Index with Johnson. I have.
“At this rate, it won’t be long before Austin overtakes Boise as the country’s most overvalued market,” he said. “Austin has done so many things, including weather, culture, and the economy, and of course, it’s attracting more people who are pushing up home prices.”
Austin buyers paid a premium of nearly 68% last month, according to the Beracha and Johnson Housing Index.
Phoenix, Arizona is one of the most overrated housing markets in the United States, according to Bellacha and Johnson. Some industry experts have warned that if the housing bubble bursts, Arizona Capitol’s house prices could fall by 25%.
read more: Has the Phoenix Valley real estate market reached a pandemic limit? Seven industry experts discuss whether Phoenix’s expensive home valuation is justified, or whether there is a home modification on the horizon of the Valley of the Sun.
Beracha and Johnson determine cities that are overvalued by measuring the gap between average home prices and historical trends that indicate what average home prices should be.
Even if home prices begin to fall, the 13 major cities that still appear to be overvalued are: