Quick Las Vegas Housing Market Update

Las Vegas is getting expensive!

Inventory is still very low, we are at 21 days of inventory for single-family homes and 14 days for condos. As of March 24, 2022, the median sales price was at $455,000. That’s a 26% year-over-year increase. This week, conventional loans with a 5% down rose half a percent up to 4.85%. The Federal Reserve announced last week they will be more aggressive in raising the Federal Funds rate and will be tapering their purchase of mortgages. The Feds do not directly control mortgage rates, but they influence the market. The decline of purchase directly impacts the demand which raises rates.

What does that mean for me?

The increase in interest rates increased the monthly payment on a 5% conventional loan by $130 per month, which means the Buyer has to earn $5,000 more a month to qualify, or drop their purchase price by $20,000 to still qualify. For the last 6 months, about 29% of all single-family homes sold for cash, 53% for conventional loan, 10% for FHA and 7% for VA loans. All indications are that interest rates will continue to rise. We are expecting to see rates go to 5%.

Even if sales prices stay relatively flat, which with low inventory, that will be a challenge. At today’s rate of 4.85% and our current median sales price of $455,000, it takes roughly a household income of $105,000 to qualify. We are definitely hitting an housing affordability issue. Rents also rose 6% year-over-year, making it just as challenging to rent as it is to purchase. Hopefully when personal income figures report those also have risen to help offset the higher cost of housing.

Light at the end of the tunnel!

We know, this all sounds like bad news. However, here at the Graham Team, we’ve come up with a couple creative solutions to help you with the current housing issue, including a lease-back option for Sellers. Homebuyers, ask us about our Cash Buyer Accepted Program! We want to help you reach your real estate goals. Call us today 702-930-9551.