But could these spikes soon drop?
If you’re in the market for a new house, you might need to open your wallet a little wider than you previously imagined.
A number of states have seen major increases in home prices over the past year: Florida leads the charge with an annual increase of 29.1 percent, followed by Arizona at 28.6 percent, and then Nevada at 25.8 percent, according to the real-estate research firm CoreLogic.
But there might be some hope on the horizon: CoreLogic is also predicting that this growth is about to have a major slowdown over the next year, with prices rising just 5 percent nationwide.
The explanation behind the firm’s prediction is two-fold. For one, CoreLogic believes that home prices can’t jump further — after all, they’ve already shot up five times faster than U.S. income growth. Secondly, analysts estimate that 65 percent of regional housing markets — from Florida to New York — are overvalued, meaning that the median asking price for homes is significantly higher than the median sale price. Meanwhile, just 26 percent of U.S. housing markets are considered “normal” by comparison.
Still, just because U.S. home prices are seriously “overvalued” doesn’t necessarily mean home prices in these areas are about to drop anytime soon. In fact, Fortune predicts that home prices will increase over the next year based on four different models, including the that of Mortage Bankers Association and Zillow.
In the meantime, we break down which states are causing home buyers the biggest sticker shock.
These are the states with the highest year-over-year increases:
1. Florida: 29.1%
2. Arizona: 28.6%
3. Nevada: 25.8%
4. Utah: 25.5%
5. Tennessee: 25.4%
6. South Carolina: 23.6%
7. North Carolina: 23.5%
8. Montana: 22.3%
9. Georgia: 22.0%
10. Washington: 21.2%
