Las Vegas Valley homes are 42% higher to rent than apartments, report says
Homes are more expensive to rent than apartments in the Las Vegas Valley, according to a new report from Zillow.
According to Zillow’s ranking, it is 42 percent more expensive to rent a house than a multifamily unit in the valley. The average rent for a house in Las Vegas is $2,172, while the average rent for an apartment is $1,525, according to Zillow.
Las Vegas’ rental market skews more toward single-family homes as a portion of the overall housing stock than most other major metros in the country, Orphe Divounguy, a senior economist with Zillow, said. Las Vegas also tends to build fewer apartments than the rest of the country and apartment rents are cheaper than the national average, which help contribute to a bigger gap between apartment and home rents.
“Rental markets across the country have loosened over the past three years as construction projects start to catch up to demand. This is true for both rented single-family homes and multifamily apartments,” he said. “However, the extent differs greatly across metro areas. In Las Vegas, competition among renters for apartments has eased more than it has for single-family homes. Given the lack of construction of apartments in Las Vegas, a looser multifamily market is consistent with even lower demand for apartment living in the area.”
Gov. Joe Lombardo recently pushed legislators to issue a resolution urging the federal government to release land for housing development in Nevada as Las Vegas finds itself in the middle of a housing crisis. A shortage of available land has compounded with a number of other issues including a slowdown in building and elevated interest rates, contributing to the crisis. The state is short approximately 78,000 affordable rental units, and the Bureau of Land Management controls close to 90 percent of Clark County alone.
Home sale prices in the Las Vegas Valley also broke a record in January. The median price of a house sold in Southern Nevada last month was $485,000, the highest ever recorded, breaking the record set in May 2022 ($482,000), according to data from Las Vegas Realtors. This is also a 8.2 percent increase ($445,000) from January of last year. LVR pulls its data from the Multiple Listing Service where the vast majority of homes for sale are listed.
Where rents stand
Nationally, rents for homes are up 4.4 percent on par with their trajectory before the COVID-19 pandemic while apartment rents have grown 2.4 percent annually, which is down from around the 3.5 percent growth seen from 2018 to 2019. Overall, home value appreciation has come down to 2.6 percent year over year, compared with 5.2 percent back in December 2019.
Rents for single-family homes are up 41 percent since before the start of the pandemic, compared with only 26 percent for multifamily rent. High mortgage rates clamping down buyer demand and home value growth coupled with historic levels of multifamily units coming onto the market across the country are playing into underlying market forces, said Skylar Olsen, Zillow’s chief economist.
“Right now, more multifamily units are hitting the market than at any time in the past 50 years, but detached homes aren’t seeing the same surge in construction,” she said. “We’ve also got the large millennial generation wanting to move into a larger space. High and unpredictable mortgage rates and hefty down payments are pushing some to rent that lifestyle instead of buying it. Similarly discouraged, some homeowners may return to the market and sell to capitalize on record prices, rather than continue to wait for lower rates.”
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.
