DFW at minimal risk for home price shakeout


A major mortgage insurance company has lowered the threat level for Dallas-Fort Worth’s housing market.

Arch Mortgage Insurance Co.’s just-released housing report says the area now has a “minimal” risk of home price declines.

In 2016, the same insurer warned that DFW had a “moderate” risk of home price softening.

Now only Fort Lauderdale, Fla., and Nashville, Tenn., are rated as home markets with a moderate risk of home price declines.

Austin was given a “low” risk of negative home price adjustments.

With home prices in North Texas up more than 40% in the last four years, several analysts have red-flagged the local housing market for unsustainable price increases.


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New York-based Fitch Ratings says home prices in the DFW area are 10% to 14% higher than what’s sustainable, according to its latest report.

Arch Mortgage Insurance gives Texas cities only an 8% chance of home price drops.

“Overall, risk remains low in the top 50 metros,” Arch Mortgage Insurance analysts say. “While home prices are increasing in every state, the recovery has been uneven, with 14 states still below their prior peaks.

“On the flip side, about 10% of U.S. metros are red-hot, with prices 20% or higher than their prior peak.”

DFW prices have risen about 11% in the last year, according to the mortgage insurance firm.

“People waiting for home prices to fall before buying may want to change their strategy, as the overall housing market is expected to stay strong for the foreseeable future,” said Ralph DeFranco, global chief economist of mortgage services of Arch Capital Services Inc. “Our research shows no housing bubble is forming in the United States, with prices overall near historic norms compared to incomes.”

Prices in North Texas are more than 30% overvalued, Arch estimates.

Even so, the North Carolina-based company considers DFW one of the nation’s hottest housing markets.

“Texas’ business-friendly and low tax policies are attracting large inflows of businesses,” Arch Mortgage Insurance’s report says. “Given the positive fundamentals, prices are more likely to continue going up rather than fall back to past levels of affordability.”


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