How did homes in Las Vegas become 10% more affordable from July to October?

What does affordability for homeowners look like at the moment? Generally speaking, the housing market is considered affordable if the average mortgage rate falls within 30% (roughly) of a buyer's monthly gross income. Therefore, the monthly payment amount is the main factor used to determine housing affordability. Three other factors determine monthly payment:

1. Home Prices: From July to the end of September 2024, median home prices have remained relatively flat at around $480,000 for a single-family home. A single-family home is a non-attached home, meaning it does not include townhomes, condos or four-plexes.

2. Down Payment: In our affordability analysis, we used the minimum down payment for most conventional loan programs at 5%; the FHA minimum is 3.5% without down payment assistance grants, and the VA is at 0%. Many of our clients are able to use down payment assistance grants to reduce their total out-of-pocket to just a few thousand dollars, but for this analysis we used standard down payments.

3. Interest Rates: The market has shifted significantly since July, with rates dropping by 1.25% as of the published rate on October 1st. The impact of this rate adjustment on affordability is substantial. We compared July’s figures to the end of September’s, and as you can see from the data below, the percentage decrease in mortgage payments was over 10%.

July 2024 Median Home Price: $480,000

Average Mortgage Payments on the Median Home Price: (Principal, Interest, Property Taxes, Insurance and Mortgage Insurance)

September 2024 Median Home Price: $479,000

Average Mortgage Payments on the Median Home Price: (Principal, Interest, Property Taxes, Insurance and Mortgage Insurance)

Per rates published on Oct. 1, 2024

Rates are volatile and we have seen swings in rates move by half a percent in one day, as several data points affect the daily rate. Just like home values are affected by supply and demand, mortgage rates are affected by the number of buyers seeking to obtain Mortgage Back Securities, which is the funding platform for mortgages. Mortgage rates usually follow the 10-year treasury yields. As bond prices go up, mortgage rates tend to decline, and the reverse is also true – as bond prices fall, mortgage rates rise. Mortgage lenders have historically tied their interest rates close to the 10-year treasury bond rates, however, we have seen a break in this trend several times over recent years. A good guide to seeing where mortgage rates are headed is to look at the daily 10-year bond rate.  

The following graph by Mortgage News Daily shows the 10-year treasure yield with the 30-year mortgage rate:

https://www.mortgagenewsdaily.com/mortgage-rates/30yr-treasuries

With a simple Google search, you can track both the 10-year treasury yield and current mortgage rate trends. Mortgage rates for each applicant will vary due to personal factors that affect their offered rate, but overall market trends provide a good indication of what mortgage rate you can expect to be offered.

We publish the 30-day average median home price on our social media platforms every Tuesday, together with the current mortgage rates for Clark County, NV. 

If your dream home feels just out of reach, follow our updates or connect with one of our real estate advisors to stay informed on rate drops and price shifts that could bring it within budget. When we understand your homebuying goals, we can offer tailored advice and information that’s unique to your situation.

Graham Team Real Estate • (702) 930-9551 • Team@grahamteamnv.com

3007 W Horizon Ridge Pkwy, Ste. 210, Henderson, NV 89052