Las Vegas builders sell fewer homes amid rising mortgage rates

Homebuilder sales activity fell sharply in southern Nevada last month as buyers across the country retreated due to rising borrowing costs.

Locally, builders recorded 911 net sales — new purchase contracts less cancellations — in Southern Nevada in April, down nearly 30% from March, according to a new report from Home Builders Research, based in Nevada. Vegas.

Last month’s sales tally – hit in the middle of the normally busy spring buying season – was the lowest of 2022, leaving builder sales totals this year through April down 18% from the same four-month period last year, the company reported.

Altogether, “this trend may continue as mortgage rates continue to rise,” Home Builders Research president Andrew Smith wrote in the report.

Sales of newly built homes and older properties in the Las Vegas Valley have fallen lately as once-low mortgage rates rise and rising selling prices continue to reach new all-time highs.

Nationally, the average rate on a 30-year home loan was 5.25% last week, down from 3% a year earlier, according to mortgage finance giant Freddie Mac.

Locally, the median builder’s closing price for a new home in Southern Nevada was a record $473,673 in April, up 19.7% from a year earlier, Home Builders Research reported.

Additionally, the median sale price of previously owned single-family homes in Southern Nevada was a record $475,000 last month, up 26.7%, or $100,000, from April 2021, reported. the Las Vegas Realtors trade association.

Fueled in large part by cheap borrowing costs that allow buyers to stretch their budgets, Southern Nevada’s housing market accelerated last year. Homes sold quickly, buyers paid above asking price, supply was tight and rapidly rising prices hit new all-time highs virtually every month.

Overall, it has become increasingly difficult to buy a home in the more expensive and, some say, increasingly unaffordable Las Vegas area, even as southern Nevada saw a record number of resales last year.

However, the main fuel for the frenzy – cheap money – got away and sales volume plummeted locally and nationally. In the United States, resales fell for the third consecutive month in April, the National Association of Realtors recently reported.

Lawrence Yun, the group’s chief economist, said higher prices and “significantly higher” mortgage rates have “reduced buyer activity”.

Las Vegas agent Bobbie Starr Dust said Monday that the valley’s real estate market is “stabilizing” but “certainly far from dead.”

Dust, an agent for Berkshire Hathaway HomeServices Nevada Properties, said he listed a home last week that has now received offers after being on the market for five days, compared to the “five minutes” it previously took to present. several offers.

Realty One Group agent Judi Hirsh said Las Vegas remains a seller’s market overall, given the still-tight inventory of listings, but the market is “softening up” and not experiencing the “madness” of just a few months ago.

In March, one of her clients was one of 11 bidders on a property and had to “significantly” exceed the asking price, she said. Today, unless a house had a very low price, Hirsh wouldn’t expect to see so many offers in a place.

Contact Eli Segall at [email protected] or 702-383-0342. To follow @eli_segall on Twitter.

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