Have you ever wanted to own your very own penthouse overlooking the strip after dark or stroll over from your patio to the well-kept green at Southern Highlands Golf Club? Now is the perfect time to make your dream a reality.
The Las Vegas housing market has been on fire despite uncertainty and economic headwinds brought about by COVID-19.
The number of available single-family homes for sale in Las Vegas for May 2020 decreased by 20.9% compared to the same period last year1. Luxury condos and townhomes also saw a distinct drop in inventory by almost 12.7% for the same period1.
Similarly, 66.4% of single-family homes and 59.7% of condos and townhomes that were listed, sold within 30 days or less1.
But what has really helped drive demand for Las Vegas luxury real estate are favorable mortgage interest rate trends. Mortgage interest rates are at near record lows with the most recent record low for a 30-fix rate mortgage hitting 3.03% on July 9, 20202.
If you are thinking about taking the leap towards luxury Las Vegas living, here are some reasons to buy now while mortgage interest rates are at near all-time historic lows.
No Income Tax Means More Savings
Nevada is one of the 7 states that does not inflict income taxes on its residents3. This can be a major savings factor further amplified by locking in a low mortgage interest rate.
As a savvy homeowner you may want to allocate your additional savings towards paying down the principal balance on your mortgage faster, thereby saving you interest over the life of your loan.
Alternatively, consider the lack of income taxes as a counterweight that can offset your monthly housing expense. The money you save each month may provide you the flexibility to take out a larger loan amount thereby increasing your purchasing power.
Pick-up More Purchasing Power
Getting a low mortgage interest rate can also equate to more buying power when you decide to pull the trigger on a new home purchase. More buying power will open up more properties that you can afford and make it that much easier to find your luxury Las Vegas home.
For example, if you consider a 30-year fixed rate mortgage for $1,000,000 at 3.00%, your monthly principal and interest payment would be approximately $4,216.04.
Even a year ago, interest rates were closer to 4.00% for the same 30-year fixed rate mortgage. Assuming the term and monthly payment stay the same, the difference between 4.00% and 3.00% would translate to a decrease of roughly $117,000 in purchasing power.
Lower Your Interest Expense
Intuitively, a lower interest rate can mean less money you have to pay in interest over the life of your mortgage. While rates are near record low now, the trajectory of mortgage interest rates has nowhere to go but up. This means that waiting could be a roll of the dice and cost you more money if you wait to a future date to buy.
Even if you could obtain a comparable interest rate a few months or years from now, you may be stuck paying hefty buydowns or discounted points in order to obtain more favorable repayment terms. It may be smart to buy now rather than pay later.
Sources
1 May 2020 Monthly Housing Market Update (Rep.). (2020, May). Retrieved September 8, 2020, from Las Vegas Realtors website: http://myresearcher.com/glvar-section-new/images/MonthlyMarketReportMay2020.pdf
2 Mortgage Rates Hit Another All-Time Record Low. (n.d.). Retrieved September 8, 2020, from https://freddiemac.gcs-web.com/news-releases/news-release-details/mortgage-rates-hit-another-all-time-record-low#:~:text=MCLEAN, Va., July 09,history dating back to 1971.
3 Sraders, A. (2018, August 21). Seven States Without Income Tax and What You Need to Know. Retrieved September 8, 2020, from https://www.thestreet.com/personal-finance/taxes/states-without-income-tax-14680778
