Out-of-state buyers and remote workers are turning their attention to the city
It’s an increasingly popular housing market for out-of-state buyers and remote workers – and falling mortgage rates are stirring optimism about even busier times ahead for mortgage professionals in Las Vegas.
A pronounced dip in average 30-year fixed mortgage rates well below 7% has spurred an uptick in interest from hopeful buyers both within the city and beyond, according to a top Vegas-based loan officer.
Crystal Schulz (pictured top), of SimpliFi Mortgage Las Vegas, told Mortgage Professional America that recent glimmers of good news for the mortgage market had translated into a growing number of calls from clients ready to step off the sidelines. “We’ve seen a pretty big pickup in our applications now,” she said.
“A lot more people are interested, and it feels like they’re coming off the fence. That’s good – [there’s] a lot more curiosity in our marketplace and just a lot more people qualifying too.”
It’s not all plain sailing for would-be buyers in the Vegas market: plenty are still pushing out the max on the debt-to-income ration, Schulz added. However, falling rates in recent weeks have also helped bring about much higher attention towards refinancing as homeowners take advantage of lower borrowing costs.
Why out-of-town buyers are strengthening interest in Las Vegas
Prospective buyers frozen out of purchasing a home in the likes of Los Angeles, San Francisco, and Seattle are finding plenty of opportunity in Las Vegas. Redfin said buyers in those areas searched to move into the region more than any other last month – while a clear majority (67%) of Vegas homebuyers aspired to stay within the metropolitan area rather than move elsewhere.
While first-time buyers in those markets may find Vegas prices insurmountable, “we are getting those people moving in from more expensive markets like California, Colorado, and Seattle. It’s less expensive,” Schulz said.
A majority of those are either retired or able to work remotely, with some other buyer types also apparent. “We do have some unique situations, especially borrowers from Hawaii where maybe one will stay behind and keep working and the other will move here and start living,” she explained, “because it is such a vast difference in the cost of living that they’re better off moving their family to live here in Las Vegas and keep working in Hawaii.”
The Federal Reserve cut its funds rate by 50 basis points yesterday, a bigger move than many had expected and one that could herald the beginning of a series of reductions by the central banks in the months ahead.
Breaking News: The US Federal Reserve has cut interest rates by 0.5% for the first time in four years, bringing the overnight rate to 4.75-5%.
— Mortgage Professional America Magazine (@MPAMagazineUS) September 18, 2024
Read more: https://t.co/mVQLLgWuvg
Mortgage rates may not drop significantly in line with that move – but Schulz said confidence is growing among buyers and mortgage professionals alike that things are looking up for the market. “I’m hoping that [the rest of the year] is like the last month or two or maybe even better so that we can get some more originations going,” she said.
“I’m hopeful. I don’t think that it’s going to be a tough market – I think it’s going to be a better market than it’s been in the last two and a half to three years.”
What impact has the NAR settlement had on the mortgage industry?
Mortgage professionals across the country are still coming to terms with the impact of changes to realtor commission rules as a result of the landmark National Association of Realtors (NAR) settlement.
Reaction to those adjustments has varied, Schulz said. “I do see a lot of people who have been doing a lot of business, finding it easy to write this contract, ask for the commission and have this discussion,” she said, “but people who don’t do very many deals are kind of at a loss and concerned. They just are uncertain. There’s a lot of uncertainty among some newer or less producing agents.”
The new rules, which require realtor commission to be negotiated upfront instead of being automatically included in a property’s list price, haven’t necessarily seen Schulz and her team make any big changes. “We’re always making sure that our clients are aware of everything that they’re spending,” she said.
“[We’re] just making sure that we’re double-reading and having that conversation – if we don’t see the commission list, then we’ve got to talk to the agent to make sure that everything is set up for success.”
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