Las Vegas mortgage delinquencies rose sharply after the coronavirus pandemic devastated the economy.
But the share of local homeowners behind on their payments is still nowhere near the peak of the Great Recession a decade ago.
Payments were at least 30 days late on 8.5 percent of Southern Nevada home loans in April, up more than double from 3.4 percent in March, housing tracker CoreLogic recently reported.
Nationally, payments were at least 30 days late on 6.1 percent of mortgages, up from 3.6 percent in March.
Delinquencies in April rose most in coronavirus hot spots, such as New York and New Jersey, and in tourism and convention destinations such as Florida, Hawaii and Nevada, CoreLogic reported.
CoreLogic chief economist Frank Nothaft noted that the pandemic has pummeled the hospitality, entertainment, travel and food service sectors, which collectively form the foundation of Southern Nevada’s tourism-dependent economy.
“Sadly, I’m not surprised that it jumped more in Las Vegas than it did in many other markets,” he said of the mortgage delinquency rate.
Still, homeowners around the country fell behind on their payments after the pandemic shut down much of the economy virtually overnight. According to Nothaft, the U.S. unemployment rate was at a 50-year low in February and soared to an 80-year high within two months.
“It’s totally unprecedented,” he said.
Las Vegas’ unemployment rate, just 3.9 percent in February, shot up to a jaw-dropping 34 percent in April after Gov. Steve Sisolak ordered casinos and other businesses closed in March to help contain the virus’ spread. The housing market took a hit from the chaos but hasn’t collapsed, and its volatility eased as people returned to work the past few months.
Propping up the market: Unemployed Nevadans have received billions of dollars in state and federal jobless benefits since the pandemic hit, helping them pay their rent or mortgage. Struggling homeowners also have been allowed to suspend their mortgage payments amid the turmoil under so-called forbearance programs, and Sisolak in late March ordered a statewide freeze on evictions and foreclosures.
The market still faces plenty of unknowns. Las Vegas’ economy remains on shaky ground as COVID-19 infections surge again, and Nevada’s foreclosure moratorium, which is now winding down, did not let people live for free. Homeowners must figure out how to pay off any missed mortgage payments.
Residential evictions and foreclosures can resume in full in Nevada on Sept. 1.
Despite the pandemic-sparked financial pain, Las Vegas’ share of delinquent mortgages in April remained nowhere near what it was a decade ago after the housing bubble burst and the broader economy tanked.
In Southern Nevada, ground zero for America’s real estate boom and bust, a peak of nearly 25 percent of mortgages were at least a month delinquent in early 2010, compared with a peak of 12 percent nationally around the same time, CoreLogic previously reported.