A new report shows that this year home builders in Las Vegas are selling more homes, booking higher prices and pulling more permits compared to 2015.
So far this year through June in Clark County, buyers purchased 3,422 new homes. Home Builders Research, a Las Vegas housing tracker, reports that this is a 12.7 percent increase compared to this same period last year. For June closings, the median sales price was $327,622, which was an 8.1 percent increase from one year ago and back to the levels from summer 2007. Data from RCG Economics shows that in August 2007 the median price for Las Vegas new homes hit a record high of $338,560.
Plans for new homes have risen dramatically
Construction plans have also been ramped up by builders. This year 4,710 new home permits have been pulled through June. The report states that this represents a 14 percent increase for the same period last year.
In the report, Dennis Smith, founder of Home Builders Research, indicated that during the first half of 2016 there were stronger than anticipated new home closing results.
He said that one year ago, a majority of professionals in the lending and housing industries were expecting that mortgage rates would increase enough that it would slow down consumer demand. The Federal Reserve has instead only raised interest rates one time, and mortgage rates have decreased, which suggests that lending and housing markets weren’t as robust as some of the government agencies such as the Fed would have liked them to be.
The national average interest rate is down from last year
According to Freddie Mac, in June the national average interest rate on 30-year home loans was at 3.57 percent, down from the June 2015 rate of 3.98 percent and the June 2014 rate of 4.16 percent.
In the meantime, Smith attributes higher Las Vegas sales prices to larger price tags: increasingly new homes are being priced at more than $400,000, with fewer being priced under $250,000.
Smith stated that if more house were priced under $250,000 and built within decent areas, that we would see a lower median price.