Las Vegas Housing Market
While new residential construction last month firmed a bit, it is only a one month snapshot and it's far too early to discern whether that increase is an aberration or the basis for an upswing. What is not aberrative, however, is a report today that home mortgage delinquencies are continuing to increase.
According to a report from Moody's Economy and Equifax, 2.33% of mortgages were delinquent at the end of the third quarter, the highest level since 2003, with the delinquency rate in Las Vegas up 1.33 percent from a year ago, the second biggest jump in the nation and the rate at 3.15 percent.
While according to the report, "the latest increase appears to be more closely tied to looser lending standards, borrowers tapping their equity and slowing home-price growth," it is also eminently true that the increase is particularly notable because bad loans normally climb when the economy weakens and job losses rise. Las Vegas has enjoyed high employment with unemployment levels well below the national rate, until recent months during with the Nevada rate has steadily approached the national level.
Overall, the level of bad loans remains manageable, but higher loan losses could force lenders to cut back on credit, making it more difficult for some borrowers to get a loan. A spike in foreclosures could also help push home prices downward in some markets if lenders were forced to sell significant numbers of homes at a loss. With considerable, perhaps record levels of housing inventory on hand, especially in Las Vegas, there is little doubt that the local economy is settling in for a rather long period of at least modest economic distress, notwithstanding an apparent strong tourist industry.
Stern And Company
Las Vegas Housing Industry Las Vegas Economy Mortgage Delinquencies
According to a report from Moody's Economy and Equifax, 2.33% of mortgages were delinquent at the end of the third quarter, the highest level since 2003, with the delinquency rate in Las Vegas up 1.33 percent from a year ago, the second biggest jump in the nation and the rate at 3.15 percent.
While according to the report, "the latest increase appears to be more closely tied to looser lending standards, borrowers tapping their equity and slowing home-price growth," it is also eminently true that the increase is particularly notable because bad loans normally climb when the economy weakens and job losses rise. Las Vegas has enjoyed high employment with unemployment levels well below the national rate, until recent months during with the Nevada rate has steadily approached the national level.
Overall, the level of bad loans remains manageable, but higher loan losses could force lenders to cut back on credit, making it more difficult for some borrowers to get a loan. A spike in foreclosures could also help push home prices downward in some markets if lenders were forced to sell significant numbers of homes at a loss. With considerable, perhaps record levels of housing inventory on hand, especially in Las Vegas, there is little doubt that the local economy is settling in for a rather long period of at least modest economic distress, notwithstanding an apparent strong tourist industry.
Las Vegas Housing Industry Las Vegas Economy Mortgage Delinquencies
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