Housing Markets Heat Up: 98 of 100 Largest US Metros Are Overvalued

A new report from Florida Atlantic University and Florida International University has revealed that homes are selling above their historical price levels in 98 out of the 100 largest U.S. metropolitan areas. The top 10 markets with the highest premiums above their historical averages include seven in Florida, with Cape Coral posting a 47.99% premium, the highest on the list, followed by Tampa and Palm Bay, with premiums of 42.81% and 42.60%, respectively.

Buyers in those markets and in the majority of major U.S. metros continue to be discouraged by low inventory, high mortgage rates, and soaring home prices. Consumer sentiment regarding home purchases recently reached an all-time low due to persistently high mortgage rates, Insider reports.

In Cape Coral, the researchers listed the expected price for a typical home at $271,013. However, the average price that homes in the area are actually selling for hovers at $401,063.

The housing market is plagued by low inventory, mortgage rates above 20-year highs, and soaring home prices. Conventional wisdom suggests that rising rates should lead to falling prices, though that hasn't happened yet. Now, many Americans are unwilling to move homes or buy a new home due to high mortgage rates, which keeps potential buyers and sellers off the market.

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