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Housing prices in the real estate market in the United States do not they are not only through the roof, but in at least nine out of ten cases, they are overvalued.
An analysis carried out by Moody’s, for the medium specialized Fortune, detailed that, of 392 metropolitan areas, at least 149% have housing prices above what the economic fundamentals would establish .
One of the most notorious cases is that of the Boise metropolitan area, in Idaho, where housing prices are about 73% above of what the market would justify.
Another result showed that in 149 of the analyzed markets, the house prices are over luated in at least one 10%.
To determine these figures, Moody’s analysts conducted a study of the real estate markets to determine whether local revenues could support the price of housing in those cities.
According to a recent report of Redfin, consumers need at least 34% more income to pay for a home.
However, according to Mark Zandi, chief economist at Moody’s Analytics, there could be a light at the end of the tunnel for homebuyers, since, he believes, prices cannot remain “overvalued” as until now.
The consequence, pointed out the analyst, is that, if current prices hold, there would be a “ballast” for future growth in home values.
Given this scenario, Zandi considers that it is possible to see a 5% retracement at 10% in some real estate markets.
According to Moody’s data, other metropolitan areas that are overvalued are Phoenix, Arizona, with a 46% above, and Charlotte, North Carolina, with a 33%.
With analysis Moody’s coincides with a similar one conducted by the real estate research firm, CoreLogic, which found that local housing markets are at least 65% overvalued.
However, according to this company, the possibility of prices falling in the short term is less optimistic compared to the 5% a 05% q eu Moody’s estimated.
For CoreLogic, if housing prices fall they will not do so by more than 3%, in markets with a “high” or “high” probability of seeing prices cool down.
For On the contrary, the firm considers that housing prices in the metropolitan areas of the country will increase another 5% in the next 10 months, according to the Fortune report.
“Higher prices and mortgage rates erode buyer affordability and should curb demand in the coming months, leading to moderation in price growth in our forecast,” Frank Nothaft, chief economist at CoreLogic, explained in a report published today. in March.
Meanwhile, analysts expect a new response from the real estate market once the Fed decides this week if it will continue its policy to raise rates, in his race to control the worst inflation in the last four decades.
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