As the sharp gains in home prices south of the border continue, more markets stateside are seeing values higher than their local economies can support.
Prices nationwide jumped 6.9% in April from a year ago, according to the latest monthly value report from CoreLogic. While that is slightly less than the 7% annual jump in March, it is still making more and more markets beyond affordability for many would-be buyers.
Of the nation's 50 largest housing markets, 52% were considered overvalued in April. CoreLogic determines affordability "by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals (such as disposable income)." In March, 50% of markets were considered overvalued.
A market is considered overvalued when home prices are at least 10% higher than the long-term, sustainable level. By the same metric, 34% of the largest markets were considered at value and 14% were undervalued.
Not all expensive markets, however, are considered overvalued. San Francisco, for example, where prices are up more than 12% from a year ago, is considered at value, because local incomes can support the area's prices. Boston is also considered at value.
