Inventory, Interest Rates & Inflation
So what's happening in the Real Estate Market?
The quick answer is that a Low Inventory of Homes is driving up Home Prices.
Rising Interest rates are making Payments on these Homes Larger.
And Rising Inflation makes everything cost more leaving
Buyers with less money to spend on Home Payments.
Since the Summer of 2019,
Inventory of Available Listings has dropped from 5,500 to under 1,400.
In that same time Home Prices have Risen from $350,000 to almost $600,000
At the Beginning of 2022, Interest Rates were 3.11%
On a Median Home Price of $600,000
You would have a P&I Payment of $2,565
Now at 5.3% that Payment would be $3,332
$767 more every month.
The Median Household Income for Nevada is under $100,000
Inflation is currently at 8.5%. This means that all the items you
spend money on cost 8.5% more than they did one year ago.
In 2021, Inflation was 7 %. That means that all the items you
spend money on cost 15.5% more than they did two years ago.
To Summarize, if you had purchased a Median Home in 2019,
when everyone was predicting a Housing Slump caused by Covid Crisis,
and a Median Home Price was $350,000 and Interest Rates were 3%.
You would have a Mortgage Payment near $1,475.
Now with Inflation being more than 15% Higher than back then.
You can buy a Median Home for $600,000 with an Interest rate of 5.25%
And Pay a Monthly Mortgage payment of $3,313
Are these Prices Sustainable?
Time will tell...
