REAL ESTATE:

What does record-low mortgage rate mean for Las Vegas home buyers? Here’s an example

Sale winds: A Henderson home is advertised for sale on July 13, 2009.

The three-bedroom residence at 1083 Hernandez Avenue shows how much difference five years and a record-low mortgage interest rate can make for prospective homeowners.

In November 2007, when the average rate for a 30-year fixed home loan was 6.21 percent, the home sold for $348,500.

Today, with the average rate having hit 3.83 percent last week, the property is on the market for $180,000.

The bottom line: Today’s buyer would save almost half a million dollars compared to the buyer of five years ago — $168,500 less up front because of the lower sales price and $297,238 less in interest over the life of the loan.

“The interest rates certainly are an encouraging factor for people to go out and purchase or refinance,” GLVAR President Kolleen Kelley said Friday. “A quarter of a point is probably not going to make a big difference on a monthly payment, but if it’s half a point, a point, two points and you’re looking to refinance or buy, now is really the time to do it.”

According to the Freddie Mac Primary Mortgage Market Survey, the rate slid from 3.84 percent to 3.83 percent last week — the lowest since long-term mortgages began in the 1950s.

Over the past two decades, 30-year fixed home loans averaged 6.9 percent.

Over the past decade, they averaged 5.93 percent. Slow U.S. job growth and financial uncertainty in Europe contributed to the most recent drop.

Thirty years ago, borrowers paid upwards of 20 percent for home loans.

Things have changed drastically since then, but today's low mortgage rate and reduced prices come with a catch: Compared to the days that led to the collapse of the housing market, lending practices are far tighter.

“You have to truly qualify,” Kelley said. “So it’s not like everyone can run out and get a mortgage like they did in a boom era.”

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  1. It's not a matter of buying now. The question is are you buying one of these homes in a stabilized neighborhood? Are the other homes owned by investors renting them to any warm body? There are still so many uncertainties in Las Vegas with buying a home that you need EXTREME caution and due diligence before just buying what a realtor is calling a "great deal"...some of these homes are surrounded by garbage neighbors. Some neighborhoods have utterly collapsed in disrepair, criminal activity, investor owned, etc. It's like the wild west in some parts of town. Use caution before jumping.

  2. Nothing, people don't have jobs unless you consider welfare, workers compensation and unemployment checks jobs.

  3. Believe it or not Mr. Wiggin but most people in this city still have jobs.

    Unemployed is 15, maybe 20% depending on how you figure it. That means that 80% still have jobs and many are doing just fine.

    Is the market at the bottom, who knows, no one does. Good thing is at these prices with the Interest rates so low many that have been renting can now afford to buy a house and some even at payments lower then their rent.

    Everything does not have to be turned negative, this market is good for those that did not like the prices in the 2006.

  4. Realtors/Brokers and Developers are the Last People I would listen to in regard to projecting Market Trends. Their sole Job is to Pump the Real Restate Market and get things SOLD or they don't make one thin dime. Had they forecast The Housing Crash they would be Billionaires instead of Bankrupt, as is the situation of many of the aggressive (Realtor) Flippers and Buyers.
    Take the Average Household Income and Multiply it by three - that should be your mid-point of the housing prices in a Normal Market. And over time Real Estate will adjust to the Normal Market.

    Las Vegas must have Quality Jobs with Good Wages, Benefits and Stability for the Working Class to feel secure enough to purchase a house with a long term commitments. Unfortunately that requires a Top Quality Educational System.

    Since exiting jobs in Casinos, Warehouses and Call Centers do not Need nor Want a Highly Educated demanding workforce, there is No Incentive from the Political Nor Business Community to really work to demand our young people are highly trained to compete in the International Workforce.

    Yes - over Decades they've flown over the Valley every One In A While and provided Lip Service, however WHERE ARE THE RESULTS !

  5. 'you have to have stellar credit to get a mortgage'. That's no basis for a gripe. You should have stellar credit when you buy a house or you're a renter. If you have ever BKd, forclosed or shortsaled - forget about buying a house again. You are not responsible enough.

    I've tried hiring folks in this town. Its no wonder the UE rate is high - what % of the pop has a criminal record, cant get to work on a regular basis, or shows up to an interview and lies through their teeth.

    I refuse to accept Las Vegas is the cause. People choose their paths and set their ways. This is a great place to live. The right people will find us.