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Is the Housing Market Overheating?

housing

As home prices [1] continue to rise, certain housing markets are seeing a much faster appreciation of home values than others, making them overvalued. These markets, according to Frank Nothaft, Chief Economist, CoreLogic [2], "have had an especially rapid appreciation that put values above their pre-Great Recession peak, even after controlling for inflation."

Does this trend indicate an overheating housing market? According to The CoreLogic Market Conditions Indicator, 32 percent of MSAs in the U.S. were potentially ‘overvalued’ in March, with most of these metros being along the sea coast. Watch the following video where Nothaft explains what these numbers indicate, and if the housing market is heading towards a valuation bubble.