A household with two incomes in the Las Vegas Valley needs to make approximately $116,563 to afford a house.
That’s down 2 percent from June of last year, according to Redfin’s latest report on the issue.
The estimated median income for a household in the valley sits at around $82,975, which means the majority of households could not afford the monthly mortgage payments on a house right now as they would have to spend 42.1 percent of their income on housing, according to Redfin.
According to Redfin, a household should not spend more than 30 percent of their monthly income on a mortgage payment or rent.
Additionally, only 18.5 percent of the home listings in the valley on Redfin’s website right now are affordable to the median household, according to the real estate company. Overall, Americans need to earn roughly $109,796 to afford a typical U.S. home for sale, which is down 0.5 percent from an all-time high of $110,382 one year ago.
Redfin Senior Economist Yingqi Xu said affordability is now trending in the right direction after years of inflationary pressures on the housing market for most buyers that was kicked off during the pandemic when mortgage rates dropped to historic lows. This kicked off a buying and refinancing frenzy in the American housing market that residential real estate has yet to recover from.
“The earnings needed to buy a house have stabilized after several years of deterioration, but that doesn’t mean homes are affordable to the average American,” she said. “There’s still a double-digit gap between what the typical household earns and what they need to comfortably buy a home, leaving many prospective first-time buyers stalled on the sidelines.”
Home prices remain stubbornly high in Las Vegas, however they are dropping in most Sun Belt cities such as Austin, Texas and Nashville. The valley remains stuck due to a number of factors, one of them being a lack of land to develop and build on in the metro region. Much of the land left to develop in the valley is controlled by the federal government.
Las Vegas Realtors reported the median sale price of a resale home in Southern Nevada in July was $480,000, down 1 percent from a year earlier but still near record highs.
Xu said while home prices remain elevated, the prevailing winds across the country in most metro regions are showing signs of trending downwards, for now.
“But even if the market isn’t becoming much more affordable, it is becoming a bit more manageable for house hunters,” she added. “It’s a buyer’s market in most of the country, especially places that were once pandemic homebuying hotspots like Nashville and Austin, giving buyers lots of options to choose from and strong negotiating power.”
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.
