LAS VEGAS (KTNV) — The latest interest rate cuts by the Federal Reserve could be a game-changer for anyone looking to buy a home or refinance.
How will this shake up the real estate market in Southern Nevada? I called a mortgage banker and a local realtor to find out for you.
"I think that the lowering of interest rates is the first big step in the right direction," said out-of-state buyer Reagan.
Reagan and her husband tell me they've had their eye on Las Vegas, but they were in a similar situation to many others.
"Interest rates and inflation have been affecting not only real estate markets but every aspect of our life," she said.
She said the high interest rates kept them on the sidelines, but with this .5% rate cut by the Federal Reserve, she is feeling optimistic.
"I think that is something that is a huge factor, because when looking at purchasing a home or making a big move, does it work, does it fit into our budget, can we find a home that we can afford those monthly payments?" she said.
To understand what this interest rate cut means and how it could impact families like Reagan's, I asked local mortgage banker Darin Hahn. He tells me that even though this rate cut will lower costs, we won't see a mortgage rate change right away.
"Usually it takes two to three months. The Fed rate is good for lines of credit, credit card, but I predict rates will drop in the 5s in the next six to eight months," he said.
Hahn said in the next few months, he believes mortgage rates will drop around the area of 5%.
He also said with this rate cut, eventually, competition for homes could heat up.
That's good news for sellers, but real estate team leader Alex Vazquez said just the anticipation of a cut was enough to rattle those standing by.
"We are seeing an upswing in buyers," he said.
Vazquez said local buyers need to be ready. He recommends getting pre-approved and having your finances in order or else you may miss out.
"We already have historically low amount of homes for sale, so less homes will be on the market because more aggressive buyers will be coming for those homes, so all financial economists predict price gains on properties next year," Vazquez said.
Out-of-state buyers like Reagan are eager to enter the market.
"With the interest rates lowering, that means it is going to give more people the chance to look at different price points that were completely out of their price range before," she said.
Hahn also suggests that anyone with a mortgage rate over 7% should consider refinancing.
He advises those looking to buy in Las Vegas to talk to a lender as soon as possible to see what you can afford and strategize your best approach.
With interest rates dropping, here are some tips for Las Vegas homebuyers:
- Lock in Low Rates: Interest rates fluctuate, so lock in a lower rate as soon as possible to secure a favorable mortgage.
- Get Pre-Approved: Start by getting pre-approved for a mortgage. This shows sellers you’re serious and gives you a clear idea of your budget.
- Consider Refinancing: If you already have a mortgage at a higher rate, refinancing could save you money in the long run.
- Act Quickly: With lower rates, more buyers may enter the market. Be ready to move fast if you find the right property.
- Explore New Listings: Builders are offering incentives as more homes are being constructed. Look at new builds and check for potential savings or special offers.
- Work with a Local Realtor: A realtor familiar with the Las Vegas market can help you navigate competitive offers and find the best deals. Be sure to take a look at previous rules that have changed for realtors.
- Evaluate Future Plans: If you’re planning to stay in your home long-term, locking in a fixed-rate mortgage while rates are low can provide stability.
