New Forecast: Dallas Housing is Still Too Hot
There are more signs that the big run-up in home prices is over, with one of Wall Street’s prominent firms forecasting only modest property appreciation in 2020. And Dallas-Fort Worth is still one of the country’s most overvalued home markets, according to a new study by Fitch Ratings.
Fitch Ratings forecasts “subdued home price growth in 2020-2021 due to stretched affordability and more challenging economic growth prospects,” according to the just-released report.
Nationwide home prices are expected to increase only about 3% over the next two years.
“In the U.S., home prices will be supported by solid job growth, a high household savings ratio and low mortgage rates,” analyst Alla Sirotic writes. “However, growth will be constrained by stretched affordability and tax changes introduced in 2018 that most affect areas with higher property values and higher tax rates.
Dallas, Las Vegas, Phoenix, Toronto and Vancouver remain the most overvalued cities with home prices vulnerable to shocks.“ Fitch Ratings has been warning for several years that home price growth in Texas’ major markets has outpaced increases in incomes and is creating an affordability challenge.
Earlier this year, the ratings agency said D-FW home prices were 10% to 14% overheated. Home prices in North Texas in 2019 are rising at the slowest rate in several years. Through the first 11 months of the year, the median price of single-family homes sold by area real estate agents has risen only 3% from the same period in 2018...
