US Housing Market Cooling Off from West to East

Source: Fitch Ratings — 

Fitch Ratings-New York-10 October 2022: Fitch Ratings estimates that U.S. home prices were overvalued by 12.2% for 2Q22 on a population-weighted average basis, according to a new Fitch Ratings report. Fitch expects that the overvaluation will moderate in 2H22 with the declining trend in home prices. Home prices dropped 20bps in July, marking the first national decline since 2012.

Fitch estimates that home prices in 92% of the country’s MSAs are overvalued, compared to 83% from last quarter. Housing in approximately 65% of the MSAs is more than 10% overvalued, compared to 4% overvalued pre-pandemic. Home prices are the most overvalued in Idaho, Hawaii, and North Carolina. Among the top 100 most populated MSAs, Rochester, NY is the most overvalued, followed by Buffalo-Cheektowaga-Niagara Falls, NY and Ogden-Clearfield, UT.