With this year’s huge spikes, North Texas property prices could be up to 24% overvalued, according to the latest warnings from a Wall Street rating firm.
Fitch Ratings has been raising the alarm over Dallas-Fort Worth property prices for several years. But so far the concerns of Fitch analysts and other housing economists have not curbed housing costs in D-FW and other major US markets.
Local home prices were between 20% and 24% overvalued in the first quarter, the latest study found.
Las Vegas has been ranked as the most overheated home market in the country, with 30 to 34% overvalued prices, according to Fitch.
Home prices in more than 40% of the country’s metropolitan areas are more than 10% overvalued and are considered unsustainable.
And nationwide, prices are overvalued by 9.8%, according to the analysts, mainly due to the lack of real estate on the market.
“New housing supplies have been a problem since the 2008 housing crisis, and the pandemic has exacerbated the imbalance,” Fitch analyst Suzanne Mistretta said in the report. “However, the potential for higher mortgage rates could put pressure on affordability and herald a possible slowdown in house price growth in 2022.”
Also, the number of homes for sale across the country could increase if the current federal foreclosure moratoriums are lifted.
Fitch analysts say the resumption of foreclosures “could take the steam off future home price growth. Foreclosures provide a source of housing supply. “
A chronic shortage of apartments for sale at a time of rising demand has driven D-FW property prices to record levels.
And many buyers pay more than the asking price for houses because of the competition for real estate.
In May, average property sales prices in North Texas rose 26% year over year, according to the latest data from local real estate agents.
The average retail price for single-family homes is a record $ 341,000.
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