Are D-FW home prices out of control?
With this years huge increases, North Texas home prices may be as much as 24% overvalued, according to the latest warnings from a Wall Street ratings firm. Fitch Ratings for several years has been sounding the alarm about Dallas-Fort Worths home prices. But so far concerns by Fitch analysts and other housing economists havent put the brakes on housing costs in D-FW and other major U.S. markets. Local home prices were between 20% and 24% overvalued in the first quarter, the latest study found. Las Vegas was ranked as the most overheated home market in the country with prices 30% to 34% overvalued, according to Fitch. Home prices in more than 40% of the countrys metro areas are more than 10% overvalued and considered unsustainable. And nationwide prices are 9.8% overvalued, the analysts say, due primarily to the shortage of properties on the market. New home supply has been an issue since the 2008 housing crisis and the pandemic has worsened the imbalance, Fitch analyst Suzanne Mistretta said in the report. However, potential for higher mortgage rates could pressure affordability and augur a possible slowdown in home price growth in 2022.  Also, the number of homes for sale around the country could rise when current federal foreclosure moratoriums are lifted. Fitch analysts say the resumption of foreclosures could take the steam out of future home price growth. Foreclosure properties provide a source to the housing supply.  A chronic shortage of homes for sale at a time of increasing demand has pushed D-FW home prices to record levels. And many buyers are paying above asking price for houses because of the competition for properties. In May, median home sales prices in North Texas soared by 26% from a year earlier, according to the latest data from local real estate agents. Median single-family home sales prices are at a record $341,000.