Las Vegas home price growth shoots past US average

Las Vegas home price growth sped past the fast-rising U.S. average again in March, and there’s no telling when prices will hit the brakes, a new report shows.

Southern Nevada house prices were up 28.5 percent year over year in March, compared to 20.6 percent nationally, according to the S&P CoreLogic Case-Shiller index released Tuesday by S&P Dow Jones Indices.

All 20 markets tracked for the report showed double-digit annual price gains. Topping the list was Tampa, Florida, where prices skyrocketed 34.8 percent from a year earlier.

This also marked the 10th consecutive month that Las Vegas’ price growth outpaced the national average.

It’s a safe prediction that price gains will begin to slow, but the “timing” of that “is a more difficult call,” said Craig Lazzara, managing director at S&P Dow Jones, in a news release.

The report underscores America’s ongoing housing frenzy, and how prices keep accelerating despite rising mortgage rates that have increased buyers’ borrowing costs.

‘Inflection point’

Overall, buyer demand has “held strong” despite interest rates reaching levels not seen in more than a decade and record-breaking price growth, said Dan Handy, economic data analyst with listing site Zillow, in a statement Tuesday.

The market, however, “may be nearing an inflection point when it comes to price growth,” he said, adding that house hunters “will likely start to rethink what they can afford” and that sellers “may already be responding,” as the rate of price cuts is on the rise.

Following the most heated year for housing in a while — in which cheap borrowing costs fueled a buying boom of rapid sales and record prices — sales totals locally and nationally have dropped lately as once-rock-bottom mortgage rates push higher.

At the same time, sales prices keep rising, and homes that do sell are trading quickly.

Lawrence Yun, chief economist with the National Association of Realtors, pointed to the rare state of U.S. housing in a recent news release.

“The market is quite unusual as sales are coming down, but listed homes are still selling swiftly, and home prices are much higher than a year ago,” Yun said.

‘This trend may continue’

Nationally, the average rate on a 30-year home loan in April was 4.98 percent, up from 3.45 percent in January and 3.06 percent in April of 2021, mortgage-finance giant Freddie Mac reported.

In Southern Nevada, the median sales price of previously owned single-family homes was a record $475,000 in April, up 3.3 percent from March and 26.7 percent from April of 2021, according to trade association Las Vegas Realtors, which pulls data from its resale-heavy listing service.

Amid the typically busy spring buying season, 3,001 single-family homes traded hands in April, down 8.3 percent from March and 14.9 percent from April 2021, the association reported.

Homebuilders’ sales activity has also tumbled lately in Las Vegas.

Builders logged 911 net sales — new purchase contracts minus cancellations — in Southern Nevada in April, down nearly 30 percent from March, Las Vegas-based Home Builders Research reported.

The monthly sales tally in April was the lowest of 2022, leaving builders’ sales totals this year through April, down 18 percent from the same four-month stretch last year, the firm reported.

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

Realty One Group agent Judi Hirsh said recently that Las Vegas remains a seller’s market overall, given the still-tight inventory of listings.

But, she added, the market is “softening” and isn’t experiencing the “craziness” of even a few months ago.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.