Report: Home Prices Could Dip in 183 Markets

Home prices could fall in 183 ''overvalued'' markets if the housing recession continues, according to data mapped out from Moody's Analytics.

The map shows that 183 of the 413 top housing markets are ''overvalued'' by more than 25%, which some believe could translate to a decline in prices of as much as 20% if the slump in housing sales continues.

While overall, Moody's chief economist Mark Zandi told Fortune that home prices would either drop around 5% or stay the same, areas with much higher overvaluations, such as Boise, Idaho, and Flagstaff, Arizona, which have overvaluations of 72% and 60% respectively, could see steeper declines.

According to the New York Post, the Moody's estimate of prices declining 5% to 20% should the recession continue, track with estimates from other financial agencies.

Fitch Ratings estimates prices falling by about 15% nationwide, and economist Robert Shiller, who predicted the 2008 housing crash, estimates a decline of around 10%, the report said.

The estimates come has the U.S. housing market experienced its sixth straight month of declining sales, the lowest level since 2020.

The National Association of Realtors reported Aug. 18 that existing home sales dipped 5.9% from June and 20.2% compared with last year, caused at least in part by rising interest rates.

"The ongoing sales decline reflects the impact of the mortgage rate peak of 6% in early June," said Lawrence Yun, the association's chief economist, in an Aug. 18 press release. "Home sales may soon stabilize since mortgage rates have fallen to near 5%, thereby giving an additional boost of purchasing power to home buyers."

The nation's total housing inventory increased in July 4.8% over June, with more than 1.3 million available units, and properties staying on the market for about 14 days, the fewest number of days since the organization began tracking it in 2011.

According to the organization, the median price of an existing home in July was $403,800, a 10.8% increase from the July 2021 median price of $364,600.

"We're witnessing a housing recession in terms of declining home sales and home building," Yun said. "However, it's not a recession in home prices. Inventory remains tight and prices continue to rise nationally with nearly 40% of homes still commanding the full list price."

The number of first-time buyers dropped from 30% in June to 29% in July, according to the association.

• Fed Chair: Expect Pain as Fed Works to Beat Inflation
• Dow Plummets 1,000 Points as Powell Affirms Hawkish Stance