With the mortgage market currently suffering from headline risk, Street analysts are saying that housing is overvalued.

Deutsche Bank recently issued an in-depth report on the outlook for U.S. home prices over the coming two years. The firm's analysis focused on the top 25 metro areas based on subprime/Alt-A mortgage loans outstanding and the top six worst metro areas - Detroit, Boston, Providence, St. Louis, Cleveland and Memphis - based on serious mortgage delinquencies. In their study, they said the U.S. housing market entered this year in "bubble mode" and that more than half of the housing markets were overvalued by 20% or more relative to historical relationships among home prices, income, interest rates, and home prices relative to rents.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.