In this paper we use a relatively general intertemporal asset pricing model where housing services and consumption are non-separable to obtain a measure of the potential overvaluation of housing in relation to rents in Spain, the United Kingdom and the United States. The results show that part of the increase in real house prices during the late nineties can be seen as a return to equilibrium following some undershooting of house prices after previous peaks. However, more recently, marked increases in house prices have led price-to-rent ratios to well above equilibrium in all three countries by 2002. More specifically, the price-to-rent ratios were around 20% above equilibrium in Spain and the UK, and around 7% in the US. Part of that overvaluation "particularly in Spain and the UK" may be attributable to the sluggishness of supply in the presence of large demand shocks in this market and/or the slow adjustment of observed rents to the conditions prevailing in the housing market.