Recent data indicates a significant rise in the number of homes for sale across the United States, with Las Vegas experiencing the most pronounced increase.
According to a report by the National Association of Realtors, listings in Las Vegas without offers have surged by 77 percent compared to last year.
The report attributes this spike primarily to an exodus of retirees from the area, contributing to a flooded housing market.
In addition to Las Vegas, Washington, D.C. saw a 63.6 percent increase in inventory, while Raleigh, N.C. recorded a 56.4 percent rise.
Overall, the nation has witnessed a 28.9 percent increase in homes available for sale.
At the close of June, Las Vegas Realtors reported that there were 6,992 single-family homes without offers, reflecting a 70 percent rise from the previous year.
The number of condos and townhomes in a similar situation climbed to 2,564 in Southern Nevada, marking an 87.6 percent increase over the previous year.
Sales in June also dropped by 7 percent compared to the same month last year, with the average home lingering on the market for over 30 days.
Approximately 80 percent of homes being sold are expected to close within 60 days.
Despite the current uptick in housing stock, the inventory remains below pre-pandemic levels.
Realtor Jeff Crampton noted that having between 6,000 and 10,000 properties on the market generally signifies a healthy market.
However, he highlighted two main factors deterring prospective buyers: rising interest rates and ongoing unsettling financial news that has left consumers anxious about making significant spending decisions.
Many borrowers are exploring ways to mitigate the impact of rising interest rates, such as opting for adjustable-rate mortgages (ARMs), which generally provide a lower initial rate for a limited period.
Mike Fratantoni, Senior Vice President and Chief Economist of the Mortgage Bankers Association, reported that the proportion of borrowers applying for ARMs reached its highest level since November 2023 due to the increase in rates.
Despite the attractive initial rates associated with ARMs, experts caution that they come with higher risks than traditional 30-year fixed-rate loans.
Analysts are sounding alarms that the state of the housing market signals broader economic challenges ahead.
Mark Zandi, Chief Economist at Moody’s, indicated that the housing sector could soon become a significant obstacle to overall economic growth, raising concerns about the economy’s trajectory later this year and into early next year.
He further warned that home sales, construction, and prices are poised to decline unless mortgage rates significantly drop from their current near 7 percent levels.
In light of these developments, President Donald Trump is advocating for a drastic reduction of the benchmark interest rate, currently set between 4.25 and 4.5 percent, down to 1 percent.
Economists, however, worry that such a move could lead to further economic turmoil and increased inflation rates.
In fact, the inflation rate did rise in June, reaching 2.7 percent, which is the highest level since February, with experts pointing to Trump’s tariffs as a likely contributing factor.
On the flip side, the existing housing market is not devoid of interest, as purchase applications rose by 25 percent year-over-year, according to HousingWire.
While some sellers are reluctant to lower their prices, experts believe many homes are reasonably priced for the current market conditions.
Crampton explained that properties listed at excessive prices often do not attract showings, whereas homes that are priced competitively receive substantial interest.
However, the current lack of offers, despite significant showings, suggests that buyers, while willing, are hesitant due to concerns regarding financing costs.
LVR President George Kypreos shared that home prices have remained stable overall this year, emphasizing that the uptick in available homes is beneficial for buyers and should encourage sellers to set realistic prices.
The median price for existing single-family homes sold in Southern Nevada reached $485,000 in June, representing a 1 percent increase from the previous month and a 2.1 percent rise from last year, tying with the record established in the first quarter.
Meanwhile, in Washoe County, the median sales price of existing single-family homes climbed to $616,400 in June, up 3.8 percent from May and 2.7 percent from last year, with inventory rising by 7.7 percent month-over-month and 46 percent year-over-year.
Though home prices have held steady amid declining sales, Zandi from Moody Analytics warned that they are likely to stagnate or decline in the coming months.
Real estate agent Diane Varney noted a 95 percent increase in price reductions across Southern Nevada compared to last year, suggesting a necessary market correction following rapid appreciation during the pandemic.
Despite this increase in price reductions, homes remain at historically high levels.
Varney pointed out that the Multiple Listing Service often fails to reflect seller concessions, which can distort views of true sale prices.
She emphasized that appraisers frequently reach out to agents to ascertain the full details behind sale prices, which may not be represented adequately in listing data.
Even builders, who previously reduced interest rates to stimulate sales, are now pulling back, according to Zandi, who described the current building climate as untenable.
He observed that many builders are delaying land acquisitions from land banks, signaling potential declines in new home sales and construction starts.
For those buyers who are attempting to navigate the current market, motivations largely stem from significant life changes such as marriage, divorce, or expanding families.
Crampton and Varney stressed that non-motivated sellers who might have previously been indecisive about selling are largely absent from today’s market.
Varney further highlighted a concerning trend where one in five deals is falling out of escrow, noting that climbing inventory enables buyers to pivot to more favorable listings.
With buyers increasingly sensitive to changing market conditions, their uncertainty is palpable.
This story first published in Nevada Current.
image source from：governing
