Moody’s: Housing Correction Coming – but No Crash

Moody’s Analytics Chief Economist Mark Zandi predicts that the latest Federal Reserve interest rate hike will cause a housing correction across the United States – but there won’t be a housing crash.

He suggests that the Southeast and Mountain West are the most overvalued housing markets, and the pendulum will swing back down. Cities and states due for a correction include Phoenix and Tucson in Arizona, the Carolinas, northeast Florida, and above all, Boise – “the most overvalued market in the country,” according to Moody’s analysis.

While a reduction in housing prices is likely, however, renters won’t see any immediate relief because homebuyers have few options even if values fall.