Updated June 28, 2022 - 2:40 pm
Las Vegas’ soaring home prices grew faster than the national average yet again in April, a new report shows, and sales totals have dropped lately as buyers face ever-rising costs.
Southern Nevada house prices were up 28.4 percent year over year in April, compared with a 20.4 percent gain nationally, according to the S&P CoreLogic Case-Shiller index released Tuesday by S&P Dow Jones Indices.
This marked the 11th consecutive month that prices grew faster locally than in the country overall.
House prices grew a staggering 35.8 percent in Tampa, Florida, the biggest annual jump among the 20 markets tracked for the report.
Locally and nationally, homebuyers have pulled back lately as higher mortgage rates wipe out the cheap money that fueled America’s unexpected housing boom after the pandemic hit.
Moreover, sales prices are still logging huge year-over-year gains, making it all the more expensive to buy a home as people also face higher costs for gas and other daily goods.
Rising mortgage rates, record-high asking prices and increased sales offerings have resulted in cooling demand and growing inventory, a “welcome downshift” for markets that “seemed stuck in the fast lane for two years,” George Ratiu, senior economist at listing site Realtor.com, wrote Tuesday.
Across the U.S., “sales volume is dropping in response to affordability constraints,” and more buyers will “take a step to the sidelines in the coming months,” Nicole Bachaud, economist with listing site Zillow, said in a statement Tuesday.
But as buyers pull back, this will help inventory recover and price growth slow from its peak, “leading the market back to a more balanced” state in the long run and providing more homeownership opportunities “for those priced out today,” she added.
In the past few months, amid a jump in mortgage rates and as prices keep setting record highs, Southern Nevada has seen fewer home sales, a rising share of price cuts, and a growing — albeit still relatively low — tally of available listings.
The median sales price of previously owned single-family homes — the bulk of the market — was a record $482,000 in May, up 25.2 percent, or $97,000, from a year earlier, according to trade association Las Vegas Realtors.
Just over 2,900 houses traded hands last month, down 8.8 percent from May 2021, and 3,570 single-family homes were on the market without offers at the end of May, up 75.8 percent from a year earlier, the association reported.
Across the U.S., the pace of resales dropped for the fourth consecutive month in May and is expected to keep sliding, the National Association of Realtors reported.
Overshadowing housing markets nationally is the recent jump in borrowing costs, as the Federal Reserve has raised interest rates lately in an effort to cool inflation.
The average rate on a 30-year home loan last week was 5.81 percent, up from 3.02 percent a year earlier, mortgage-finance giant Freddie Mac reported.
Sam Khater, Freddie Mac’s chief economist, said in a news release that the combination of rising rates and high home prices is “the likely driver of recent declines” in home sales.
“However, in reality many potential homebuyers are still interested in purchasing a home, keeping the market competitive but leveling off the last two years of red-hot activity,” he said.