Dallas continues to be one of the cheapest big city housing markets in the country, according to a new comparison of U.S. housing costs.

The annual price report by residential sales firm Coldwell Banker says similar houses in Dallas cost about 28 percent less than the national average.

The “snapshot” comparison is based on the purchase of a 2,200 square-foot single-family home with four bedrooms, two and one-half baths, a family room and a two-car garage located in a neighborhood that would appeal to relocating families.

That house costs $302,198 in the Dallas area, compared with an average of $422,343 in the 317 U.S. markets Coldwell Banker surveyed.

Bad news came in threes for the real estate industry Tuesday as two nationwide economic reports and one from California showed the housing slump is accelerating.

California home sales plunged nearly 30 percent last month compared with August 2006 and median prices dropped by almost 14 percent in the High Desert area and part of Santa Barbara County, the California Association of Realtors said Tuesday.

In the Bay Area, sales of existing homes dropped 26.5 percent in the same time period, but, because of more sales at the higher end of the market, the median price of a single-family home actually rose 9.9 percent from August 2006, to $832,760. That was down about 1.1 percent from July’s median of $841,660.

Applications for home-purchase loans dropped significantly last week as long-term interest rates climbed higher, the Mortgage Bankers Association reported today.

The market composite index, a measure of total mortgage application volume, was down 2.8 percent on a seasonally adjusted basis from mid-month, according to MBA. Leading the decline was a 7.3 percent drop in the index that tracks purchase loans, despite a 3.3 percent increase in the refinance index.

Interest rates on long-term loans increased for the second straight week, MBA reported, with the average contract interest rate on 30-year fixed-rate mortgages last week rising to 6.38 percent from 6.29 percent the week before and the 15-year fixed rate jumping to 6.06 percent from 5.99 percent.

Resale single-family median home prices fell in 11 of 20 regions in California while sales dropped 27.8 percent in August compared to the same month last year, the California Association of Realtors trade group reported this week.

Median single-family existing-home prices increased 2 percent statewide in August compared to August 2006, despite falling in most regions. Meanwhile, the statewide median price in the entry-level price range of less than $500,000 dropped 5.1 percent in August to $349,360 compared to $368,210 in August 2006.

Three years ago, plenty of folks considered Patrick Killelea to be a loony tune raving about real estate Armageddon.

While most Americans - and especially people in the Bay Area - swore by the gospel that investing in real estate was a sure road to riches, Killelea, a disenchanted house hunter, peddled a heretical counterview: The housing market was a gigantic bubble ready to burst. Through his blog, Reality Parser (www.patrick.net), he expressed his view that home prices were grotesquely overinflated.