Las Vegans must now make over 6 figures annually to afford a mortgage

A Las Vegas household must make at least $113,186 annually to afford a mortgage, up 15 percent from a year ago, according to a new report from Redfin, an online real estate brokerage.

The median monthly mortgage payment for Las Vegas residents now sits at $2,830, and the median home sale price is $415,000, according to Redfin.

“In a homebuyer’s ideal world, rising mortgage rates would push demand and home prices down enough to make up for high interest payments,” said Redfin economics research lead Chen Zhao in a release. “But that’s not what’s happening now. Although new listings are ticking up slightly, inventory is still near record lows as homeowners hang onto their low mortgage rates, and that’s propping up prices.”

Las Vegas faces a number of headwinds toward a path of affordable housing and rental rates, including rising interest rates, a lack of supply of affordable housing units and a slowdown in listings. And Wall Street hedge funds have been buying up single family homes and renting them out.

The average rate on the benchmark 30-year home loan rose to 7.57 percent from 7.49 percent last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.92 percent.

Matt Hennessy, a Las Vegas-based mortgage adviser, said there is a workaround occurring within this tight market whereby homebuyers buy down their mortgage rates through seller concessions that reduce monthly payments but don’t lower the sale price of the home.

“My advice to those that are waiting on the sidelines for either mortgage rates or home values to drop is this: Housing inventory increases during this time every year and inventory is still at historic low levels,” he said. “When interest rates do eventually drop, there will be a surge of interested homebuyers taking advantage of the same opportunity and you will experience increased competition like that of 2020 and 2021, (with) multiple offers at or above the asking price due to low levels of inventory for the foreseeable future.”

According to a study from the National Low Income Housing Coalition, Nevadans need to make nearly $30 an hour to afford a fair market rent (no more than 30 percent of your income going to housing) on a two-bedroom apartment that rents for $1,455.

This means a Nevada household must earn at least $4,851 monthly or $58,212 annually to afford the rent. This falls slightly below the national average of $59,450 and ranks Nevada as 15th highest in the country in terms of how much a household needs to make to afford a place to live.

The report also said the rising costs of living, which have gone into overdrive since the pandemic, are hitting low-income people the hardest.

“Despite low unemployment levels and stabilizing rent prices, low-wage workers and other renters with limited resources continue to struggle to afford their rents. Millions of families renting their homes simply do not have adequate income to afford even modest housing.”

Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.