Map Popup Area
Transparent Image Northwest North Las Vegas Summerlin Lakes Downtown Spring Valley Southwest Southeast Las Vegas Strip Whitney Green Valley Green Valley South Boulder City Sunrise Map
Northwest Northwest
Silverstone Ranch Sky Canyon &
Providence
Centennial Painted
Desert
Los
Prados
Desert
Shores
North Las Vegas North
Las Vegas
Aliante Sun City
Aliante
Summerlin Summerlin
The Vistas /
The Paseos
Eagle Hills Red Rock
Country
Club &
The Ridges
Lakes Lakes
Queensridge Peccole Ranch
Downtown Downtown
Historic
District
Spring Valley Spring Valley
Spanish Hills Spanish Trails
Southwest Southwest
Rhodes Ranch Mountain’s edge Southern
Highlands
Southeast Southeast
Las Vegas Strip Las Vegas Strip
Whitney Whitney
Green Valley Green Valley/
Henderson
Cadance & Lake Las vegas The Fountains Tuscany
Green Valley South Henderson/
Green Valley South
Silverado Ranch Macdonald Ranch Anthem Country Club &
Seven Hills
Inspirada
Boulder City Boulder City
Sunrise Sunrise
Nellis Airforce Base Stallion Mountain
702-748-8100

Main Content

Further Proof This Isn’t a Housing Bubble

Further Proof This Isn’t a Housing Bubble | Keeping Current Matters

Two weeks ago, we posted a blog which explained that current increases in home prices were the result of the well-known concept of supply & demand and should not lead to conversations of a new housing bubble in Las Vegas. Today, we want to look at home prices as compared to current incomes as further proof.

Here is a graph showing the monthly mortgage payment on a median priced home in the U.S. over the last 25 years:

Further Proof This Isn’t a Housing Bubble | Keeping Current Matters

Mortgage payments are currently well below the historic average over that time period. Purchasers are not overextending themselves to buy a home like they did on the run-up to the housing crash.

Lawrence Yun, the Chief Economist at the National Association of Realtors, recently explained in a Forbes article:

“Even though home prices are climbing far above people’s income, exceptionally low mortgage rates have permitted people to buy a home without overstretching their budget. For someone making a 20% down payment, the monthly mortgage payment at today’s mortgage rates would take up 15% of a person’s gross income. During the bubble years, it was reaching 25% of income. The long-term historical average is around 20%. Therefore, a middle-income household does not need to overstretch their budget much if at all to buy a typical home.”

Bottom Line

Due to low interest rates, demand for housing has dramatically increased in Las Vegas and cross the nation. This has caused a jump in home prices. However, low interest rates have also allowed the monthly cost of buying a home to remain well below historic norms. We are in a strong housing market, not a housing bubble.