With the huge increases this year, North Texas home prices could be overvalued by 24%, according to the latest warnings from a Wall Street rating firm.
For several years, Fitch Ratings has sounded the alarm bells on Dallas-Fort Worth home prices. But so far, concerns from Fitch analysts and other housing economists have not held back housing costs in D-FW and other major US markets.
Local home prices were overvalued between 20% and 24% in the first quarter, according to the latest study.
Las Vegas has been ranked as the most overheated domestic market in the country with prices overvalued by 30-34%, according to Fitch.
Home prices in more than 40% of metropolitan areas nationwide are overvalued by more than 10% and considered unsustainable.
And prices nationwide are 9.8% overvalued, analysts say, mostly due to the shortage of properties in the market.
âThe supply of new homes has been a problem since the 2008 housing crisis and the pandemic has exacerbated the imbalance,â Fitch analyst Suzanne Mistretta said in the report. “However, the potential for higher mortgage rates could put pressure on affordability and signal a possible slowdown in home price growth in 2022.”
Additionally, the number of homes for sale across the country could increase when current federal moratoria on foreclosures are lifted.
Fitch analysts say the resumption of foreclosures âcould dampen future growth in home prices. Foreclosure properties provide a source for the housing supply.
A chronic shortage of homes for sale at a time of increasing demand has pushed D-FW home prices to record highs.
And many buyers pay more than the asking price for homes due to competition for properties.
In May, median home selling prices in North Texas climbed 26% from a year earlier, according to the latest data from local realtors.
Median selling prices for single-family homes hit a record high of $ 341,000.