Moody's economist Matthew Walsh sees US home prices on a national basis as slightly overvalued.
According to the renowned market research firm's model, national median prices are currently 15.7% above their fundamental value, leading Walsh to believe they'll face another 4-4.5% decline in the coming months. The model accounts for variables like construction costs, household formation rates, and where home prices stand relative to median incomes. Nationally, homes are the least affordable relative to incomes that they've been in four decades, Walsh said.
But as the saying goes, all real estate is local, and some areas of the country are more overvalued than others. Below, we've listed where every state — plus Washington, DC — stood as of Q2 2023, according to Moody's model. We've also included their median home prices as of September, pulling data from Redfin.
Walsh said that he considers home prices in any state where they exceed their fundamental value by over 10% as "overvalued." The states are listed from the least to most overvalued.