A report on housing prices by Global Insight says that although prices for single-family homes are still heading downwards across the country, the rate of decline has gone down and "extreme overvaluation of house prices is essentially non-existent."

The only states that had extreme overvaluation in the second quarter were Hawaii, Washington, Oregon and Utah.

The country's housing prices are down 4.8%, falling in 152 of the 330 metropolitan areas included in the study. This is an improvement from the 6.6% decline seen in the first quarter of 2008 and the drop off seen in 295 (89%) of the 330 areas in the fourth quarter of 2007.

The most severe losses are in California, Florida and Michigan. Indeed, 43 of the 50 worst metropolitan areas are found in these three states.

Still, though the numbers paint an improving picture the report says "real estate markets are not ready to recover. The building and financing excesses of the boom years have yet to be worked off. There remains a huge inventory of unsold homes on the market with foreclosures adding more daily."

The House Prices in America study looks at 330 of the top metropolitan real estate markets in the United States, representing 78% of the country's housing units.

By Megan Ainscow - CEP News Ltd. 2008