OREANDA-NEWS. U.S. home prices continue to rise with certain markets becoming overvalued, most notably in San Francisco according to Fitch Ratings in its latest quarterly U.S. sustainable home price report.

Home prices in the Bay area have risen to a level unsupportable by area income. Driven by the booming technology sector, San Francisco home prices hit an all-time high in third-quarter 2015 (3Q'15) and are now 62% above their post-recession low in early 2012. With home prices up over 10% in the past year alone, the San Francisco housing market is now roughly 16% overvalued, according to Managing Director Grant Bailey. 'The last time the Bay Area experienced this kind of home price growth was during the dot-com era from 1997-2000' said Bailey.

Similarly, home prices increases in some Florida and Texas markets are also outpacing sustainable growth. At the national level, the housing oversupply on the heels of the recession has dried up. For sale inventory has declined and the percentage of new homes sold prior to completion has normalized while new home construction spending continues to show strength.