Residents of Las Vegas Valley now need to earn at least $115,990 per household to afford the typical home for sale, according to a new report from Redfin.
This marks a 4.5 percent increase from the same time last year (end of February), with the median home sale price in the valley at $439,301, just shy of a record high.
Chen Zhao, lead economist for Redfin, highlighted the increasing unaffordability in Las Vegas, attributing it to an influx of buyers from other less affordable metropolitan areas such as California and New York, in addition to local buyers.
“Las Vegas is unaffordable because it attracts buyers from other states, especially California but also even New York, in addition to locals,” Zhao said.
“It is a perennially popular migration destination especially for higher income households.
After the L.A. fires, that trend may be exacerbated.
This is on top of what plagues affordability in the rest of the country, which is chronic underbuilding relative to housing demand as well as some amount of investor activity.”
From January to March of this year, data shows that the most popular destinations from which people are moving to Las Vegas include Los Angeles (6,438), followed by San Francisco (1,370) and Seattle (1,180).
Conversely, the top places Las Vegas residents are leaving to move to are all located in Arizona, including Phoenix (403), Lake Havasu City (248), and Tucson (164).
Renters in the Las Vegas Valley are facing similarly challenging conditions, with Redfin reporting the median asking rent for all unit types at $1,486.
This indicates that a household needs to earn $59,440 annually to afford rent in the valley, a 2.5 percent increase from the same time last year.
On a national scale, American households need to make $116,633 a year to afford the median-priced home for sale, which is slightly above the average for the Las Vegas Valley.
Moreover, this necessity is 81.8 percent more than the $64,160 required annually to afford the typical apartment for rent in the U.S.
Last year, at the end of February, a household required $110,808 to afford the typical U.S. home for sale, while two years ago, this amount was $101,341.
Back in 2021, a household needed to make only $63,925 to afford the typical home for sale in the country, showcasing the drastic increase in housing prices since the onset of the pandemic.
In fact, home prices in the Las Vegas Valley have essentially doubled since the start of the pandemic.
Elijah de la Campa, senior economist at Redfin, stated that this exponential price increase is complicating the aspirations of Americans seeking homeownership.
“It has become increasingly challenging for American renters to make the shift to homeownership thanks to the triple whammy of rising home prices, high mortgage rates, and a shortage of houses for sale,” De la Campa noted.
He added, “The gap between what someone must earn to buy versus rent may shrink in the coming months, but only because rents are expected to rise as the number of new apartments hitting the market tapers off due to a construction slowdown.”
The Redfin report also indicated that homebuyers, sellers, and renters may face a prolonged period of economic uncertainty due to President Donald Trump’s newly announced tariffs.
While these tariffs could potentially lead to some mortgage rate relief, that outcome isn’t guaranteed.
However, they are anticipated to cause higher construction costs, increased home prices, higher unemployment, and slower economic growth.
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