Notices of default issued to property owners across the Las Vegas Valley jumped 28% year-over-year, signaling growing distress in the housing market, according to a summer report from UNLV’s Lied Center for Real Estate.
The significant increase points to more homeowners struggling to meet their mortgage obligations.
The biggest impact seems to be in east and southwest Las Vegas and North Las Vegas, said Nicholas Irwin, research director at the Lied Center and associate professor in the department of economics at UNLV.
“If you overlaid a map of poverty rates or you overlaid a map of per capita income, these would be areas that generally have lower income, higher poverty,” Irwin said. “So it’s not unexpected that, if the economy tends to worsen a little bit, these are probably going to be the areas that are going to be first responding to something through an increase in defaults and potential foreclosures.”
Nevertheless, for now, the prevailing message among Irwin and other experts seems to be: Don’t worry.
Notices of default, or NODs, may be trending upward and more widespread across the valley, but Irwin emphasized that they were still nowhere near historic levels. He also added that not every NOD actually ends in a foreclosure.
“This isn’t 2008,” he said. “We’re not seeing 6,000-plus a month being filed.”
What could cause a rise in NODs?
Approximately 5,400 individual property owners have been issued a notice of default since January 2022, the UNLV report showed. Nearly 25% of recorded defaults occurred in the first six months of this year.
Homeowners newly defaulting on payments could have been relying on Biden-era programs that have since been sunsetted by the Trump administration, Irwin said.
Additionally, he said, when borrowers previously would have issues with their mortgage servicer, the Consumer Financial Protection Bureau could serve as a conduit to hold those parties accountable and ensure effective communication and processes for borrowers having issues or in financial distress.
Since April, however, the Trump administration has sought to lay off over 1,400 employees at the bureau. And, according to an August report by NPR, a federal appeals court panel has ruled that the dismantling of the bureau may continue.
“So, that’s one less support pillar at home,” Irwin said.
Homeowners may have also taken out an adjustable-rate mortgage before or during the pandemic that has now reset and adjusted back to the current mortgage interest rates, he said.
That could mean around an extra $1,000 payment per month, Irwin said, which could have caught people by surprise. He also pointed to high unemployment as a contributor to increased mortgage defaults, and a dip in tourism.
The Las Vegas Convention and Visitors Authority reported that around 400,000 fewer people traveled to Las Vegas in June compared with 2024, for an 11.3% drop that the organization attributed to “persistent economic uncertainty” and other factors.
“If tourism continues to slump, and if the gaming numbers continue to decline, that could potentially mean more people out of work and perhaps more distress in the future,” Irwin said.
The idea of higher future inflation, because of tariffs or the growing national debt, makes the bond market weary, Irwin said, which generally means mortgage rates must stay high because mortgage providers need a premium to issue loans to guard against future economic uncertainty.
“Because these are 30-year loans,” he said. “A lot can happen in 30 years. They want to guard against some potential future default, or sky-high inflation or any issue that may come. So that’s why they need a high rate on that — to cover against the uncertainty in the future.
”Housing supply and demand dynamics have adjusted over the past several months as interest rates have remained elevated and economic concerns have bubbled up for consumers, said Brian Gordon, a principal with local research firm Applied Analysis. Mobility of homeowners has downshifted as a result, he said.
The average Nevada homeowner has substantial equity in their home, he said, while the average interest rate on outstanding mortgages in the state stands at just over 4% — well below the market rates. The likelihood of homeowners relocating within the market or outside of Southern Nevada is therefore limited, Gordon said.
“While the numbers are up slightly from where they were a year ago,” Gordon said, “the reality is that the health of the housing market, from a default perspective, is relatively strong.”
Las Vegas’ unique housing market
Though sales are down because of interest rates and that lack of mobility, Gordon said, the local housing market continues to expand because of strong population migration, leading to a high demand for housing.
Las Vegas’ housing market is unique for a few reasons, Irwin said. First, it’s in a low-tax state compared with its neighbors like California, making it attractive to transplants, which means more demand for housing and higher prices.
Second, he said, the city’s economy is predicated upon tourism — an industry with jobs that are typically low-paying.
The housing supply is constrained, he emphasized, because much of the land in Southern Nevada is owned by the federal government, and what the latter doesn’t own belongs to a mixture of different municipalities that don’t always agree on zoning and permitting.
Ultimately, home prices are high and their “time on market” is some of the highest in the country, Irwin said. So, the houses are there, but there’s not enough buyers for them and their prices are too high.
“Everything is just so stuck because of those high mortgage rates,” he said. “Not a lot of folks have that kind of money.”
What to expect
The local housing market is at the whim of what may happen with mortgage rates over the next six months to a year, Irwin said.
“If we’re thinking about affordability for the broad swath of people, especially those, what we call the middle-income housing — the housing for our first responders or teachers, nurses, folks like that — we just need to build more housing,” he said. “And that’s something that the power to do that lies with our elected officials to do that.
So it’s kind of a wait-and-see approach, I guess, for homebuyers and home sellers.”
Clearly, Gordon said, consumers are less confident in the economy’s current standing. Consumer confidence levels have plummeted in the first half of 2025, considering ongoing discussions around trade policy, interest rates and slowing in the overall job market.
The Southern Nevada housing market, however, has not experienced any notable declines in overall prices yet, Gordon said. Sales have slowed, he continued, but the median home price has continued to maintain its previous levels.
“Historically speaking, the NODs are very, very low, and there’s no sign of stress,” said George Kypreos, president of Las Vegas Realtors.
Las Vegas Realtors reported more than 7,000 single-family homes were listed for sale without any sort of offer by the end of July, a number that’s up over 54% from one year earlier. Condos and townhomes listed without offers in July were up 77% from the previous year, according to a news release.
The houses are sitting a lot longer, Irwin said. That could mean a scenario where someone who may have received a default and decides to sell their house, even at a competitive price, may not have a buyer.
“So that’s certainly a potential issue, that even people who are trying to get themselves out of the default may not be able to, because there’s just no buyer for their home,” he said. “And they certainly can’t take a complete bath on it and be underwater after they sell it. That’s a big issue.”
Kypreos implied the increase in the number of homes listed for sale without offers was a symptom of unrealistic sellers, who had priced the homes for sale outside of what buyers find reasonable.
The market is quite balanced, stressed Kypreos, who also said Las Vegas’ housing market has a roughly four-month inventory. The future of the local housing market, he said, is all dependent on the economy.
“The buyers that are shopping for homes are able to find homes because there’s a tad bit more inventory,” he said. “And sellers have been willing to negotiate and offer incentives. So, honestly, the market conditions are healthy.”