Traditional Mortgages Offer Sure Bets in Las Vegas

By Joe Taylor Jr.
Local Lender Columnist
May 5, 2006
Analysts expect interest rates for home mortgages to creep up this year. The question is how those increases will slow growth in the nation's hottest housing markets. Las Vegas may follow the trends of South Florida and California with lower sales, more listings and slower appreciation.

If you're looking to buy a home in Las Vegas, this could be a good time. Economic forecasts predict that interest rates could rise as high as 6.75 to 7% for a thirty year fixed rate mortgage in 2006, which is still a historically low rate.

Some forecasters pay close attention to investors, who buy about thirty percent of the homes sold in Las Vegas. Speculators could significantly affect the real estate market there if they begin to put their properties on the market in response to slowing appreciation rates. If the market becomes more saturated, prices could be lower.

Cooling Las Vegas Appreciation Revives Interest in Traditional Mortgages

Even in a buyer's market, some mortgage experts advise proceeding with caution. Las Vegas mortgage lenders have pushed interest-only loans in the recent years of high home values and low interest rates, but taking out a more traditional loan could be a better financial decision now.

Home values in Las Vegas are not expected to sustain their twenty percent annual appreciation rate. Therefore, buying a home in Las Vegas to sell quickly for a large profit may no longer be an option. Locking in a low interest rate now for a fixed-rate mortgage could ensure a more stable long-term investment in a house that will still appreciate, just not at lightning speed.

About the Author
Joe Taylor Jr. has covered business and finance news for Financial Times Television and CNBC. He coaches beginning mortgage brokers to provide better customer service and to understand creative financing opportunities.