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While Canada’s housing market has shown recent signs of cooling, the U.S. market has never been more overvalued, according to a new report from Moody’s Investors Service.

The rating agency said that, despite mortgage rates rising in the second quarter, U.S. housing prices continued climbing too.

Nationally, prices were up by 17% over the past year, it reported.

“With more than a year of double-digit price gains, house prices now exceed their long-run fundamental values by more than 25% nationally,” it said, noting that this represents the highest level on record.

Alongside the headline increase in overvaluation, two-thirds of all metro areas are now considered “extremely overvalued,” Moody’s said — noting that there’s no major market that is considered to be undervalued, and that the country’s most overvalued markets have yet to respond to rising interest rates.

Looking ahead, the rating agency is expecting valuations to eventually respond to higher rates.

“Nationally, house price appreciation will quickly cool in the coming quarters as higher mortgage rates zap demand,” it said.

Moody’s foresees home sales slowing as affordability continues to decline in the months ahead.

“House price gains have already peaked in some markets, and a sharper decline is on the way as prices fall back in line with their fundamental value,” it said.