Taylor Morrison’s Kent Lay gives his take on the new home market

Taylor Morrison division president Kent Lay said concerns over the election and rising mortgage rates slowed sales in the second half of the year but expects the market to pick back up in 2025.

Las Vegas area home sales have been strong in 2024 and are on track to have its best year since 2021.

Lay talked to RJ New Homes as the builder opened its newest community, Lark Hill in Summerlin — a town home community priced between $460,000 and $517,000. There are 105 homes planned and models have been completed.

New home sales in the marketplace have slowed the second half of 2024 after getting off to a strong start, Lay said.

“We’re in pretty good shape for the whole year, but it has definitely taken a downturn in the last 30 days,” Lay said. “We felt a pullback in the market but up through the first half of the year we were doing great. It sank a little in July and came back a little bit in August, and September was down again, and October was down a little bit.”

Lay attributed that decline to uncertainty among buyers for two reasons. There’s confusion about the interest rates for one. Mortgage rates have inched back up in excess of 6.5 percent closer to where they were in late July after declining to below 6 percent in September after the Federal Reserve’s rate cut of a half point. The Fed cut rates by one-quarter point last week, but mortgage rates have continued to rise.

“Buyers didn’t realize that the mortgage rates had already baked in the half-point discount from the Fed by the time it happened, and they felt like the rates were going to come down once that happened,” Lay said. “The reality is the rates had already been corrected to that point. You have a lot of people sitting on the fence wondering when the rates are going to go down. That created some uncertainty for people. Now, that they’re starting to go up with the job report showing the economy is better than they thought, mortgage rates have creeped up. And some of the people sitting on the fence have started buying again because we’ve seen a little bit of a pick up.”

The second factor driving uncertainty was the election, Lay added. He said he expected now that it’s over those sitting on the sidelines who are worried about that will start buying homes again.

“But then we’re right smack in the holiday season, and that’s a slow season for us anyway,” Lay said. “That might mean we won’t see a pickup until January. Everything in my mind says we should have a good year next year based on not even tapping into the demand out there for housing. Next year will be very good for the housing market.”

Lay noted over the last four months how resale homes have seen their time on the market increase with three months of supply, up from one month in May. The amount going on the market isn’t increasing but the sales have decreased to create that supply.

“The thing about new home sales that we are able to do that resales can’t is we’ve gone out and purchased blocks of lower interest rates and been able to offer that to our buyers,” Lay said. “Resale sellers can’t do that. We’ve bought that interest rate down for them and offer a lower monthly payment than they might be getting if they purchased a resale.”

Despite those obstacles, Lay said builders can still manage the market with homes in the right location and good price point.

“We know it’s going to pick up in the first of the year, and we’re in a really good position with all our communities to be prepared for that and take advantage of that pickup in sales with products that will be appealing to a lot of buyers,” Lay said.

Taylor Morrison currently has eight active communities selling in the valley and is adding Lark Hill to the mix.

Located at Orrock Street and Kindle Rise Way, Lark Hill is a collection of two-story attached homes ranging from 1,645 to 2,163 square feet. Each home features a minimum of three bedrooms with the ability to convert one of the bedrooms into a home office or gym. All homes include a patio on the second floor to create a relaxing outdoor living area.

“It’s a very attainable product in Summerlin and one of the most affordable there because it’s attached,” Lay said. “One of the plans has a bedroom down(stairs), which is very unique for a town home project. It’s a great location right off Lake Mead and the 215 Beltway and right across from a 200-acre site designated for retail. It will be a great access for shopping and restaurants.”

Taylor Morrison has five new communities that are planned in 2025, including Skyline Ridge in the northeast with 20 lots on half-acre lots with homes up to 4,000 square feet and nine bedrooms. No prices have been set.

Ashland in Summerlin will open in January with two different product lines: 50-foot-wide and 60-foot-wide single-story homes. Prices haven’t been determined and square footage will range from the high 2,000s to mid-3,000s. Some prices on the largest homes could exceed $1 million.

In addition, there’s Cactus Ridge in the southwest valley and there’s Windsor Heights at Vegas Drive and Tonopah Drive. The latter is attainable housing ranging from 1,200 to 1,400 square feet single-family with price points not determined but expected to fall in the $300,000s.

Looking ahead to January 2026, Taylor Morrison will open four product lines in Summerlin called Esplanade at Summerlin that will consist of just under 400 homes that have resort-style amenities and service. They are expected to start somewhere in the $700,000s or $800,000s and easily surpass $1 million.

“We’re going to have a community center of 10,000 square feet, and it’s going to have a bar, sit-down restaurant, café, golf simulator, spa treatments, workout facilities and social activities along with a resort-style pool that’s going to have towel service and food and beverage,” Lay said. “We will have pickleball (courts), dog parks, walking trails and other amenities.”