Home prices in Southern Nevada are nearing the all-time high set more than a decade ago, but low interest rates and the lowest foreclosure rate nationally in two decades could prompt a bump in homeownership, experts say.
The median price of a single-family home in Southern Nevada was $310,000 in September, according to the Greater Las Vegas Association of Realtors. That’s just $5,000 shy of the pre-recession high of $315,000 set in June of 2006, when values were artificially inflated by risky lending products and collusion in the market. Prices bottomed out in January of 2012 at $118,000.
The median price of condos and townhomes was up slightly, from $170,000 in September 2018 to $171,000 this year.
“The fundamentals of the housing market remain very solid with foreclosure rates hitting lows not seen in over 20 years,” Frank Martell, president and CEO of CoreLogic, said in a statement. “We expect foreclosure rates may drift even lower in the months ahead as wage growth and lower mortgage rates provide support for homeownership.”
The average interest rate on a 30-year mortgage is about 3.6 percent, bringing the payment to income ratio (the percentage of income needed to pay principal and interest on the median home in the U.S.) to just under 21 percent, the lowest it’s been in close to two years, according to a report by Black Knight, Inc.
By contrast, the median rent in Southern Nevada for the second quarter of 2019 was $1,069, just under 23 percent of the median household income of $57,076 for Clark County in 2018, according to the American Community Survey. Median household income for Nevada was $58,646.
Mortgage delinquencies of 30 days or more were at 3.8 percent nationwide in July, the lowest level in two decades.
The share of U.S. mortgages that transitioned from current-to-30-days past due was 0.8 percent in July 2019, unchanged from July 2018. In January 2007, at the dawn of the recession, the current-to-30-day transition rate was 1.2 percent. It peaked at 2 percent in November 2008, according to CoreLogic.
Of the 10 largest markets in the U.S., CoreLogic ranked Las Vegas fifth (1.3 percent) behind New York (2.5), Miami (2.0), Chicago (1.6) and Houston (1.4) for serious delinquencies of 90 days or more in July.
Short sales and foreclosures combined to make up 2 percent of Southern Nevada’s existing home sales in September, according to the Greater Las Vegas Real Estate Association. That’s down from 2.5 percent a year ago and 5.2 percent in 2017.
The percentage of homes purchased with cash declined from 24.8 percent a year ago to 23 percent in September, well below February 2013 when cash purchases peaked at 60 percent of all sales.