Affordability Problem
The home affordability ratio in Clark County dropped seven points last month, from a healthy 106, to 99, which is one point above the average affordability level since 1980. The drop was driven by an interest rate increase from 3.54% on November 3, to 4.08 on December 1. The red bar at the edge of the chart shows what affordability would look like if interest rates were to increase to 5%. Keep in mind that interest rates below 5% are a novelty as you can see from the dashed line running through the chart. It remains to be seen what impact this will have on home sale volume or pricing going forward. October was an amazing month. The average sale price was $352,600. 87% higher than the market bottom on January, 2012. And 15% higher than the peak of the 2007 bubble!