While North Texas home price gains are slowing, the Dallas-Fort Worth area is still on a watch list of U.S. markets where residential values are overheated. Las Vegas, Portland, D-FW, Seattle and Phoenix were all on Fitch Ratings' latest list of home markets that are most overvalued. Las Vegas is the most overheated market, with home values 20 percent to 24 percent over what the analysts consider sustainable, the Wall Street ratings firm said in its new report. In the D-FW area, home values are 10 percent to 14 percent overvalued by Fitch Ratings' estimates. That's about the same rate of excess pricing the analysts cited a year ago. Nationwide, home prices rose by 7 percent annually in the first quarter, Fitch Ratings said. "Home-price growth in most regions remains largely in line with long-term sustainable levels," Fitch's report said. "However, some pockets appear to be overheating. "Several major cities in Texas also appear to be currently 10 percent to 14 percent overvalued," Fitch said. "The home price growth rate in these areas is two times to three times faster than the growth rates of their fundamental factors such as rents or income last quarter. In its rating analysis of residential mortgage pools, Fitch adjusts the home values in these areas to reflect the increased risk of a correction in the future." North Texas home prices rose by about 4 percent in the first five months of 2018 compared to the same period last year.
- Dallas Morning News, June 14, 2018