Fitch: Texas home prices significantly overvaluedFitch: Texas home prices significantly overvaluedhttps://www.recenter.tamu.edu/news/newstalk-texas/?Item=11022015-05-06T14:06:00Z2015-05-06T00:00:00Z

TEXAS - Fitch Ratings says that home prices are overheated by almost 20 percent in both Houston and Austin.

The company’s new report is warning about the current spike in Texas home prices.

In the Dallas-area residential prices are 11 percent overvalued and values are 9 percent too high in Fort Worth, according to the report.

Texas was one of nine U.S. states where the ratings agency says home prices are overheating.

Back in December Fitch Ratings warned that Texas had the most overvalued home prices in the country and that a correction could be coming because of falling oil prices.

“Although Fitch identifies many of these cities as overvalued, this is from over-exuberant growth, rather than a lack of strong fundamentals,” Fitch said in the report. “The San Francisco Bay Area cities and the Texas oil-patch cities are representative of this group.”

North Texas home prices are currently growing at about twice their long-term average rate due to a dramatic undersupply of houses on the market and strong economic growth.

Home prices in the state are also increasing at a much higher rate than median incomes.

Texas real estate analysts have warned that the current rate of home price growth in DFW is unsustainable but may continue through this year and into 2016 if home inventories remain near record low levels.

Home price overvaluation
Market Over
Austin 19%
Houston 18%
San Antonio 15%
Dallas 11%
Fort Worth 9%
Texas 11%

Source: Fitch Ratings

Read more at the Dallas Morning News.

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