The Las Vegas housing market has been moving at a dizzying pace for about a year – rapid sales, rapidly rising prices, multiple offers on homes, and more.
But the main fuel of the frenzy here and elsewhere, cheap money, got away.
The average rate on a 30-year home loan was 5.1% on Thursday, down from 2.98% a year ago, mortgage finance giant Freddie Mac reported.
Home prices in Southern Nevada and across the country are still soaring from levels a year ago, but as borrowing costs rise, buyer activity is down.
“The combination of rapidly growing house prices and the fastest increase in mortgage rates in more than forty years is finally affecting buying demand,” said Freddie Mac chief economist Sam Khater, in a press release, adding that price growth is expected to slow “to a more sustainable pace later this year.”
The Las Vegas housing boom is set to end at some point, although no one can guess when or how that will happen. Additionally, real estate markets are subject to ups and downs, especially in Southern Nevada.
As it stands, rapidly rising prices in Las Vegas continue to climb faster than other cities in the United States, availability remains limited, and affordability issues have not gone away.
But there are signs that some people are withdrawing again.
On the resale side, about 3,270 previously owned single-family homes traded in March, down about 12% from the same month last year, the Las Vegas Realtors trade association reported.
On the new construction side, builders in Southern Nevada recorded nearly 1,260 net sales — new purchase contracts minus cancellations — in March, the highest monthly tally in a year, according to Home Builders Research, based in Las Vegas.
But overall, automakers reported nearly 3,900 net sales this year through March, down 15% from the same three-month period in 2021, the company said.
He also noted that traffic from new home buyers fell 18% from such traffic a year earlier.
On top of all that, the overarching natural resource issue in our ever-expanding, drought-stricken desert metropolis – water – has been in the headlines again this week.
Southern Nevada Water Authority workers took action on Wednesday to make its Lake Mead low-level pumping station fully operational.
The move came after the nation’s largest man-made reservoir dropped enough to expose the top of its highest intake straw for the first time in its history, Review-Journal writer Colton Lochhead reported.
Yet the Las Vegas housing market, in more ways than one, continues to cover it.
Resale prices have never been higher: The median sale price of previously owned single-family homes was a record $460,000 in March, up 26.7% from a year earlier, Las Vegas Realtors.
New home prices have never been higher: The median closing price for newly built single-family homes hit a record high of $483,000 in March, up 17.8% year-over-year, reported Home Builders Research.
Rents are also skyrocketing: The typical rental rate in the Las Vegas area was $1,828 in March, up 22.7% from a year earlier, Zillow reported.
So when and how will this all end?