Southern Nevada house prices fell last month for the first time in more than two years as increased borrowing costs threw cold water on the once-sizzling market.
The median sales price of previously owned single-family homes — the bulk of the market — was $480,000 in June, down 0.4 percent, or $2,000, from the record-high set in May, trade association Las Vegas Realtors reported.
Home values are still much higher than they were a year ago, as the median sales price last month was up 21.5 percent, or $85,000, from June 2021.
Last month’s dip was by no means a dramatic one, but it was the first time that Southern Nevada’s median house price fell month-to-month since April 2020 amid the early chaos of the pandemic, the association confirmed.
Sales totals also dropped last month, as buyers picked up 2,668 single-family homes, down 8.2 percent from May and 24.7 percent from June 2021.
At the same time, the tally of available listings shot higher, as 5,746 houses were on the market without offers at the end of June, up 61 percent from May and more than double from June of 2021, according to LVR.
The association reports data from its resale-heavy listing service.
Locally and nationally, homebuyers have been pulling back lately as higher mortgage rates wipe out the cheap money that fueled America’s unexpected housing boom after the pandemic hit.
‘Some relief for potential buyers’
In recent months, Southern Nevada has seen fewer home sales, a rising share of price cuts, and growing inventory as increased borrowing costs make it all the more expensive to buy a place following a year of huge price gains and as people pay more for gas and other goods.
As Las Vegas Realtors sees it, the housing shifts are offering some “relief” to prospective buyers following a prolonged hot streak marked by rapid sales, buyers showering homes with offers, and median sales prices hitting new all-time highs practically every month.
“Rising mortgage interest rates sparked a slowdown that was bound to happen at some point,” LVR President Brandon Roberts said in a news release. “Local home prices can’t keep going up at the rate they have been the past few years. More stable prices, along with the increasing number of homes on the market and decreasing number of homes being sold, are providing some relief for potential buyers.”
Sales slowing across U.S.
The Federal Reserve has been raising interest rates lately in an effort to cool inflation. In the housing market, the average rate on a 30-year home loan in May was 5.23 percent, up from 2.96 percent the same month last year, mortgage-finance giant Freddie Mac reported.
Across the U.S., the pace of resales dropped for the fourth consecutive month in May and was expected to keep sliding, the National Association of Realtors reported.
Nationally, “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 recent statement.
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.