The Sunbelt states have undoubtedly benefited from an influx of migrating residents as well as businesses eager to take advantage of the region's growth. Unfortunately, this activity means that its housing markets are most likely due for a price correction, according to new research from Florida Atlantic University and Florida International University that based its conclusions on the cities' price-to-rent premiums in January that was taken from the Price-to-Rent Index developed by Florida Atlantic University's Real Estate Initiative.

McAllen, Texas poses the greatest risk for a correction with the area's price-to-rent premium of 22.72 percent. It's followed by San Jose, California, 22.47 percent; Charlotte, North Carolina, 15.10 percent; Durham, North Carolina, 14.98 percent; Nashville, 13.83 percent; Atlanta, 13.24 percent; Raleigh, North Carolina, 13.17 percent; Orlando, 13.07 percent; Lakeland, Florida, 12.65 percent; and Dallas, 12.32 percent.

A higher price-to-rent ratio favors renting over owning, in general. Additionally, recent price-to-rent ratios for an area that are higher than the average local price-to-rent ratio poses particular risk suggesting that homeownership is becoming relatively more expensive than renting, paving the path for a possible pricing correction. All else equal, the greater the price-to-rent premium for an area, the greater the risk for correction. A premium is measured as the percentage difference between an area's current price-to-rent ratio, and its average price-to-rent ratio.