Higher interest rates, home prices result in fewer sales at start of 2024 – The Nevada Independent

3 minutes, 5 seconds Read
image

Four years after the onset of COVID-19, housing in Nevada is still feeling the ripple effects of the pandemic as people adjust to a market that is stabilizing at a much more expensive rate than before the crisis. 

Housing prices reached an all-time high during the pandemic, peaking in May 2021, when the median cost of a single-family home reached $482,000 in Southern Nevada and $615,000 in Northern Nevada. Prices decreased and stabilized in 2022 and 2023, but are now at a median price at least $100,000 more than pre-pandemic times.

“We’re fortunate to be able to have some of these major entities coming into the state and create jobs and create opportunities for our workforce,” said Maurice Page, executive director of the Nevada Housing Coalition, a statewide nonprofit focused on increasing affordable housing options. “The housing market, though … It’s not caught up to it.”

Interest rates are now around 7 percent, compared to 3 percent during the pandemic, according to longtime Northern Nevada-based Realtor Kathleen Bolotin.

“I don’t think we’re going to ever see interest rates down to 3 percent [again],” Bolotin said. “But we’re just hoping as Realtors … to get it to 6 percent and we feel there’s a lot of people waiting in the wings to buy and sell once we get to that.”

In contrast with 2020, last year and the beginning of 2024 were marked by a slow housing market as people wait for interest rates to dip before buying a home. Sierra Nevada Realtors sold 44 percent more homes in October 2020 compared with October 2023. 

Nationally, home sales are at a 30-year low with little more than 4 million homes selling last year, a nearly 19 percent decrease since 2022, according to CBS News. The last time sales were this low was in 1995; it’s a significant dip compared with the more than 6 million homes purchased during the pandemic.

For people who can afford the price of a house in Reno or Las Vegas — the median cost for a single-family home was $534,500 in Northern Nevada and $445,000 in Southern Nevada in January 2024 — Bolotin said now is a good time to buy because homeowners can always refinance to secure a better deal once interest rates drop. 

In spite of the fact that many experts consider it to be a seller’s market, Realtors say it is still a decent time to buy.

“When [interest rates] do come down, there’s going to be a frenzy of buyers in the market and then you’re not going to be able to negotiate homes or good deals,” Merri Perry, the president of Las Vegas REALTORS, said in an interview with The Nevada Independent in January.

Additionally, Bolotin said that even though it’s a jump from pre-pandemic rates, she considers 7 percent interest rates on the lower side historically. 

“When I first started selling real estate [in the 1980s], interest rates were 18 percent. I would say that’s a bad rate,” Bolotin said. “We were doing a happy dance when interest rates went down to 10 percent.”

According to data compiled by Freddie Mac, the typical interest rate for a 30-year fixed rate mortgage was in the double digits throughout the 1980s. Throughout the 2000s and 2010s, interest rates ranged from 3 percent to 5 percent. Today’s 7 percent matches rates seen throughout the 1990s.

Page said he encourages sellers to take costs for the buyer into consideration when it comes time to sell, taking care not to drive up costs by selling to large corporations instead of local buyers.  

“We don’t want it to get into bidding wars with, you know, folks that are just blue collar that are trying to make their way, they’re trying to live their American dream of buying their first home,” Page said. “We don’t want to drive up the cost on them.”

This post was originally published on 3rd party website mentioned in the title of this site

Similar Posts