While Southern Nevada is growing in population and in economic expansion, it’s appropriate to ask whether or not the quality of our community is growing at the same rate. U.S. Census Bureau data shows the Las Vegas homeownership rate falls below the national average of 64 percent by more than 10 points.
That could be troubling news for the region since higher homeownership rates benefit the community as much as homeownership benefits individuals emotionally, physically and financially. According to the National Association of Realtors, there are several important benefits to owning your own home, including:
■ Higher educational performance for children.
■ Greater participation in civic and volunteer activities.
■ Lower crime rates.
■ And better-maintained neighborhoods.
Recently Bank of America released the results of its Homebuyer Insights Report, which explores the attitudes, preferences and behaviors of the modern homebuyer. The study found that 93 percent of those who have bought a home say they’re happier because of it, and 83 percent said they wouldn’t go back to renting. While many recognize the financial benefits of homeownership, 82 percent say they also derive satisfaction from the time they spend on hobbies and passions since purchasing a home — including new pursuits, such as gardening, cooking and interior design.
Beyond hobbies, 78 percent say they feel satisfied with the quality of their social life and credit homeownership with their improved ability to entertain and gather with friends and family.
Given interest rates have fallen in recent months to relatively low levels, we may start to see homeownership investment in Las Vegas and Clark County inch even higher as Southern Nevada expands its economic viability and neighboring western metropolitan areas offer less affordable options.
Whether to Rent or Buy
Some potential buyers on the cusp of homeownership may be weighing the pros and cons of buying versus renting. There are benefits to each, with renting allowing for greater ease if you’re planning on relocating frequently and requiring less money up front. But, rents are climbing in areas of Nevada, and Zillow calculates that it’s actually cheaper to buy than to rent in the Las Vegas area if someone stays in their home for nearly three years.
Unfortunately, many prospective buyers fear the upfront costs and self-select out of homeownership without getting all the details. In fact, 69 percent of prospective homeowners say the biggest barrier to homeownership is saving enough money for a down payment and closing costs. The good news is, solutions exist to give prospective buyers the power to get over this hurdle.
Bank of America recently launched a $5 billion affordable homeownership initiative to help more than 20,000 individuals and families overcome homebuying hurdles, including in Southern Nevada.
Benefits include a new down payment grant program that gives (no repayment necessary) eligible borrowers up to $10,000 to be used toward their down payment. Homebuyers may also be eligible to receive up to $7,500, which can be used for non-recurring closing costs or to buy down their interest rate. Through Oct. 31, we waived the lender origination fee on our affordable loans, which could mean savings of approximately $1,000.
Increasing homeownership in the Las Vegas area will be a win-win for homebuyers and for our communities and our economy. I’m proud that Bank of America is working to find solutions to make homeownership a reality for more local families.
Erik McKenzie is the area lending manager for Bank of America.