Four of the seven markets are in Texas: Austin, Houston, Dallas and San Antonio. Charleston, South Carolina, Miami and Washington, D.C., round out the list.
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Meanwhile, U.S. housing starts jumped to their highest level in almost 7 1/2 years in April and permits for future home construction soared 10.1 percent.
New home sales and pending home sales are also up.
Real estate developer Don Peebles, founder and CEO of the Peebles Corp., said the strongest housing markets in terms of pricing and demand are New York and San Francisco.
"Right now in the major cities like New York, San Francisco, Washington, D.C., and other places, there is a shortage of inventory and in fact that's slowing the market down because many people don't want to sell their own homes until they can go into a new home."
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However, he doesn't think housing is overpriced.
"If you look at where housing prices are today adjusted for inflation from the last market cycle, they are still relatively reasonably priced," Peebles said.
Howard also noted that those markets also have some of the most restrictive building requirements in the country, which drives up the cost.
—CNBC's Diana Olick and Reuters contributed to this report.