Fannie Mae (FNMA)

[navycmdr]

Homes Prices Expected to Continue to Rise;
Fitch Warns of Overheating in Previously Sustainable Areas

Tuesday March 20, 2018 ... By Brandon Ivey ... [e-mail]



Home price appreciation is expected to remain steady nationally even as interest rates increase, according to Fitch Ratings.

“Home prices have historically moved more in line with unemployment and income growth than with movements in mortgage rates,” said Grant Bailey, a managing director at the rating service. Fitch noted that the unemployment rate is near the lowest level since 2000 and growth in gross domestic product expected to remain strong through 2019.

However, an increasing number of areas also moved from “sustainable” home price appreciation to “overheated” in 2017, according to Fitch. The rating service said previously sustainable markets like Atlanta, Denver, Utah and Washington, DC have become “a bit frothy.”

Dallas, Las Vegas and Portland, OR are seen as the areas with the most overvalued home prices. Fitch said prices in those markets are overvalued by 15 percent to 19 percent and the areas are more likely to experience a slowdown in price growth or a price correction.