weather icon Partly Cloudy

Builders’ home sales down sharply from ‘21 levels

The homebuilding market kept its foot on the brake last month, as higher borrowing costs put houses out of reach for many buyers.

Builders logged 350 net sales — newly signed purchase contracts minus cancellations — in Southern Nevada in October, down 59 percent from the same month last year, according to a recent report from Las Vegas-based Home Builders Research.

Builders pulled 545 new-home permits last month, down 55 percent from October 2021, indicating a sharp drop in construction plans, and their land buying was “basically non-existent” in October, wrote Andrew Smith, the research firm’s president.

Touchstone Living founder Tom McCormick, whose Las Vegas homebuilding firm targets first-time buyers, said on Monday that house hunters have by no means vanished.

But he said the homebuilding market is “much slower” and buyer traffic has dropped off from last year’s levels. Many people can’t qualify for a mortgage, as they can’t afford the higher payments brought on by rising interest rates, he indicated.

“Our buyers are definitely feeling it,” McCormick said.

Locally and nationally, homebuyers have been largely pumping the brakes for months amid the Federal Reserve’s interest rate hikes, aimed at fighting inflation. The sharp jump in borrowing costs wiped out the cheap money that fueled America’s unexpected housing boom after the pandemic hit, sparking drops in home sales this year.

The average rate on a 30-year home loan was 6.58 percent last week, up from 3.1 percent a year earlier, mortgage buyer Freddie Mac reported.

In Southern Nevada, sales have fallen sharply from year-ago levels, sellers have increasingly slashed their prices, and builders have offered more incentives to house hunters and higher commissions to agents who bring in buyers.

Across the U.S., higher interest rates have “significantly weakened demand for new homes,” and buyer traffic is “becoming increasingly scarce,” Jerry Konter, chairman of the National Association of Home Builders, said this month.

During last year’s buying spree, area homebuilders put buyers on waiting lists, regularly raised prices, took bids for lots and, in some cases, drew names to determine who could purchase a place.

With buyers pulling back this year, Southern Nevada has seen a sharp jump in builders’ “standing inventory” of houses. Last month, the average weekly count was 371, up from 125 in January, Smith said.

He said builders were “trying to keep up with sales” over the past two years and started homes before they signed sales contracts with buyers, figuring the properties would sell quickly.

But sales have now “dropped pretty significantly,” so as a result, many homes that got underway when activity was higher are now being finished without a buyer, Smith said.

The overall buyer pool has shrunk, and more than a few people have backed out of their purchases. Last month, builders’ sales cancellation rate in Southern Nevada was 36 percent, the highest since December 2008, Smith reported.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.

Election Day 2024: What to know

Tuesday marks voters’ last chance to cast their ballot in Nevada’s primary election.

EDITORIAL: A retail theft conspiracy?

Many on the left accuse greedy capitalists at major outlets of exaggerating the problem to cover up mismanagement.

Dutch visitor dies while driving in Death Valley

The approximately 70-year-old man and his wife were visiting from Holland. The man went unconscious while driving on Artist’s Drive. His wife stopped the vehicle safely and moved her husband to the back seat.

Tram tower vandal comes forward

The individual responsible for pulling over the 113-year-old salt tram in Death Valley National Park called the tip line, stating that this was done during a time of desperation while being deeply stuck in mud, and that it wasn’t their intent to cause harm to the historic structure.

Historic Saline Valley salt tram tower pulled down

DEATH VALLEY, Calif. – The National Park Service is seeking information about recent damage to a historic salt tram tower in Saline Valley. It appears the 113-year-old tower was pulled over while a person used a winch to extract their vehicle out of deep mud. The damage happened sometime between April 1 and April 24.

Need a Real ID? Time is running out to get one in Nevada

To meet federal requirements, Real IDs will be needed for anyone looking to use their driver’s license to get through security at airports for domestic flights nationwide.

Circus coming to Pahrump

The Kiwanis Club of Pahrump Valley is sponsoring the Hugo, Oklahoma-based Culpepper and Merriweather Great Combined Circus which is coming to Pahrump at Petrack Park on Saturday, May 4 and Sunday, May 5. There will be two 90-minute shows each day at 2 p.m. and 4:30 p.m., with a free tent-raising and behind-the-scenes tour starting at 9:30 a.m. on Saturday.

Devils Hole pupfish population at 25-year high

The spring count of the Devils Hole pupfish, one of the world’s rarest fishes, showed that the population is at its highest since the spring count taken in 1999.

Sportsman’s Quest: You always remember the firsts

While looking through my old picture albums I noticed many of the pictures, and the ones I enjoy most, are of firsts – pictures of my first deer, first bear, first sheep, and first salmon. Perhaps this shouldn’t be surprising, as our memories of first events are often most vivid, and we have a special feeling for other firsts as well.

Meet the new manager for the Nye County Animal Shelter

A little more than a year and a half ago, the new 79-dog capacity no-kill Nye County Animal Shelter opened and promptly received a baptism by fire a few days later when more than 300 abused and neglected Caucasian shepherds were seized, overwhelming the facility’s capacities and resources, and capturing national headlines. These days, the shelter has returned to its normal intended function but with new leadership in place.