REPORT: Homes in Alabama among most over-valued in the U.S.

It’s no secret that house prices are skyrocketing across the U.S. But Alabama drew the attention of the folks at Fitch Ratings, who say home prices in the state are among the most overinflated home values in the entire country.

Let’s take a look at the numbers for the country and deep dive into how Alabama stacks up in comparison.

Across the country

Fitch estimates that 90% of homes in U.S. Metropolitan Statistical Areas are overinflated. Median home prices at the end of 2023 hovered around $381,400. Fitch estimates that home prices are overinflated by 11.1% – meaning a house at that median price is closer valued at $340,000.

While more houses popping onto the market would typically spell good news, Fitch warns that sky-high interest rates could taper any benefits of increased listings.

Where Alabama stands

Fitch mentioned the Southern U.S., the fastest-growing area in the country, as carrying the lion’s share of overinflation. Four of the five states with inflated home prices are in the South: Tennessee, South Carolina, Arkansas and Alabama. The fifth state is Montana.

Alabama saw a 4.3% increase in home prices during 2023, putting the median home price in the state at $272,000.

However, when you break the statistics down by MSA, you’ll find it’s cities in the Northeast with the fastest-climbing home prices, like Buffalo, New York and Milwaukee, Minnesota.

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