This age bracket isn’t buying houses in Las Vegas
Las Vegas’ youngest generation has one of the lowest homeownership rates in the country, according to a new study from Construction Coverage.
Homebuyers under 25 (Generation Z or anyone born after 1997) in the Las Vegas Valley accounted for only 3.3 percent of home purchase loans last year. Nationally, this cohort accounted for 5 percent of home purchase loans. Multiple reports have the average age of a homebuyer in the U.S. hitting its highest point in decades.
Two distinct demographic markers could be driving Las Vegas’ trend, according to Las Vegas Re/Max Central broker and owner Lori Galarza.
“Vegas hasn’t been around for that long, it’s a newer state, so I don’t know if there is the same type of generational wealth here,” she said. “And then for people who have been working in the service industry here that earn large enough incomes, they really have to be at their jobs for awhile to achieve that.”
Galarza said Las Vegas’ nomadic workforce could also be playing into this, as many people migrate here for work but do not stay for an extended amount of time and therefore don’t buy homes. She also said California buyers always have to be taken into account when looking at Las Vegas’ real estate scene given their purchasing power and the average price of homes in that state compared to Nevada.
Baby boomers are also outbuying Gen Z buyers with their increased purchasing power and generational wealth and equity they gained from buying relatively cheap homes decades ago, said Mike LaFirenza, a spokesperson for Construction Coverage.
“Las Vegas’ high demand from older buyers creates stiff competition with the percentage of homebuyers aged 55 and older ranking third among large metros at 27.6 percent.” he said. “This competition is particularly tough on younger homebuyers, who often lack pre-existing equity for their down payments, making their offers less competitive.”
The median sale price for a single-family house in Southern Nevada is approaching a new all-time high, according to data from the Las Vegas Realtors, and LaFirenza said this is also playing into buying options for young people.
“Home prices have skyrocketed in the area, with the median sale price now over 50 percent higher than pre-pandemic levels,” he said. “Even with a relatively lower cost of living, the financial hurdles for younger buyers are substantial. With cost-of-living-adjusted incomes ranked 37th out of 53 large metros, Las Vegas’ affordability gap keeps ownership just out of reach for many in their early twenties.”
Las Vegas finds itself in the middle of a housing crisis caused by a number of factors including a lack of land to develop, high interest rates, growing population, high mortgage rates and slowdown in homebuilding.
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.