Arkansas and 4 Other States Face Highest Home Overvaluation in the U

A recent study has revealed that many homes in the U.S. are currently overpriced, with the highest overvaluations found in Arkansas and four other states.

According to Fitch Ratings, by the end of last year, homes were overvalued by over 11% in about 90% of metro areas nationwide.

The states with the most significant rise in overvalued homes in 2023 include Arkansas, South Carolina, Alabama, Tennessee, and Montana.

Fitch Ratings based its findings on home price data from Redfin. Here are the median listing prices and annual changes in home prices for these states:

• Tennessee: $443,550 (up 8.3%)
• Arkansas: $299,900 (up 9.4%)
• South Carolina: $351,370 (up 7.9%)
• Montana: $649,000 (up 5.6%)
• Alabama: $330,950 (up 2.2%)

FOX Business points out that several factors have contributed to rising home prices. A study from Realtor.com in April highlighted that the supply of available homes has not improved since the pandemic began, remaining 34.3% below pre-March 2020 levels. Additionally, years of insufficient construction, high mortgage rates, and costly building materials have worsened the situation.

Fitch Ratings also identified the most overvalued metropolitan areas. The list includes two cities in Tennessee:

• Memphis, Tenn.: $172,000 (down 1.3% from last year)
• Buffalo-Cheektowaga-Niagara Falls, N.Y.: $177,500 (up 4.5%)
• Indianapolis-Carmel-Anderson, Ind.: $240,000 (up 6.2%)
• Milwaukee-Waukesha-West Allis, Wis.: $185,000 (up 5.9%)
• Nashville-Davidson-Murfreesboro-Franklin, Tenn.: $474,990 (up 1.1%)

Although prices in Memphis have decreased over the past year, they had increased over the previous five years. Fitch Ratings predicts that high home prices and mortgage rates will persist for the foreseeable future.

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