Fitch in a report Friday tempered its optimism about U.S. home price increases that have been the largest since 2005, noting that gains tend to be from factors like supply-demand imbalances rather than economic strength, and that certain markets are still overvalued.

“Some regional housing markets are overvalued because the rebound of home prices began before the bubble had completely deflated, and as a result they never reached sustainability,” Fitch director Stefan Hilts said in an email response to a question from this publication.

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