Fitch names 10 most overvalued housing markets in the US
Home prices in the United States were overvalued in 81% of US metropolitan areas as of the first quarter of 2026, MarketWatch reports, citing Fitch Ratings estimates. In 48% of all areas covered by the assessment, overvaluation exceeded 10%.
According to the rating agency's calculations, home prices nationwide were inflated by 10.3% in the first part of the year. Fitch measured overvaluation by the extent to which actual prices exceeded long-term housing valuation trends.
Markets with the largest price deviations
The highest level of overvaluation — from 20% to 24% — was recorded by Fitch in the Newark metropolitan division in New Jersey and in the Philadelphia—Camden—Wilmington area, which covers parts of Pennsylvania, New Jersey, Delaware and Maryland.
Another eight markets were assessed by the agency as overvalued by 15–19%: Chicago—Naperville—Elgin, Indianapolis—Carmel—Greenwood, New York—Newark—Jersey City, Columbus, Austin—Round Rock—San Marcos, as well as the Chicago—Naperville—Schaumburg and New York—Jersey City—White Plains metropolitan divisions. The Washington—Arlington—Alexandria area was also included in the list.
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Fitch's ranking covers both large metropolitan statistical areas and metropolitan divisions, which are smaller parts of large metropolitan areas. For example, New York—Newark—Jersey City is a larger metropolitan area that includes New York City, parts of Long Island, as well as northern and central areas of New Jersey.
High rates restrain demand
Home prices remain near record levels, although high mortgage rates have weakened buyer demand. In June, the median price of existing homes reached $440,600 — the highest figure since the National Association of Realtors began tracking it in 1999.
According to the National Association of Realtors, in August the total number of homes listed for sale reached a nearly seven-year high. At the same time, in mid-September the rate on a 30-year mortgage exceeded 7%.
Fitch expects home price growth this year to be largely zero because of high rates and limited housing affordability. The agency also said that the US housing market has shifted from stagnation to contraction due to weak demand. Fitch cited high mortgage rates, a weakening labor market, tariff pressure on construction costs, higher energy prices and geopolitical uncertainty among the pressure factors.
