Las Vegas builders posted their strongest May in home sales since prior to the pandemic and are on track to their second best year since 2020.
Las Vegas-based Home Builders Research reported 1,273 new home net sales — sales minus cancellations — in May, easily topping the 902 in May 2023 and even the 1,085 in May 2021, the strongest year since the pandemic.
There have been 5,768 new home net sales through June, a 27 percent increase over the 4,541 through the first five months of 2023. There were 5,163 net sales in the first five months of 2022 at the time the Federal Reserve started hiking interest rates that led to higher mortgage rates.
The 2024 sales are 10 percent below the 6,413 recorded in the first five months of 2021 when the housing market was on fire after the emergence from the pandemic.
Builders aren’t slowing down. They took out 1,300 permits in May, 7 percent higher than May 2023. The total for the year is 6,028, 25 percent higher than the first five months of 2023.
The strength in new home sales is telling, given that 30-year fixed mortgage rates exceeded 7 percent in May after being below 3 percent much of 2021. Interest rates have fallen below 7 percent since May, and builders continue to buy down interest rates to help buyers land their homes.
The 1,273 sales in May was 200 more than April, which is traditionally a stronger month. There were 1,317 in March.Home Builders Research President Andrew Smith said historical averages point to sales slowing in the summer months and fall.
“The cancellation percentage at 11 percent remained at an acceptable level, much improved from the past two years,” Smith said. “The conversion rate — gross sales compared to buyer traffic — for homebuilders is also at a historically strong level. Builders converted more than 8 percent of traffic into a sale, one of the highest monthly figures we have reported since at least 1999. The average for this year (7.9 percent) is more than 1 percent higher than the best year on record, 2020, where the number came in at 6.8 percent.”
Smith said that after a slow month in April there were 13 new product lines that opened for sale in May that brought more than 850 lots into the market. Only three were within master-planned communities.
“This is of note due to the fact that 54 percent of new home net sales in 2024 have come from subdivisions within master-planned communities,” Smith said. “Lennar made their re-entry into the Cadence in Henderson in May with the first two product lines in their larger Preston project and KB Home added another subdivision featuring their Greencourts product line in Inspirada in Henderson.”
The southwest valley dominated with eight of the 13 new projects and all but one were traditional single-family homes, Smith said. The other builders opening projects in May were Century Communities (Southwind), Pinnacle Homes (Ridgeline and Capstone), Summit Homes (Pebble Ridge),Taylor Morrison (Kensington Estates) and Touchstone Living (Solaris), he added.
Lennar was May’s top-selling builder with 263 net sales. Avery Pointe in the northwest had 21 net sales while The Presley town homes in Henderson had 18, Smith said.
The best-selling single community for the month was Independence from Touchstone Living in the east valley that has averaged more than 15 net sales per month since opening in October 2023, Smith said.
Home Builders Research said there were 1,056 new home closings — a lagging indicator of net sales — in May, a 7 percent increase from May 2023. The 2024 total of 4,940 is 15 percent higher than 2023 through May, Smith said.
There were 793 single-family detached closings in May, 13 percent more than a year ago. The 2024 total sits at 3,686, 11 percent higher than 2023 through May.
Attached products closed 263 units, 9 percent lower than May 2023. The 2024 total of 1,254 is 28 percent higher than 2023 through May, according to Home Builders Research.
Market share for attached new home products in May was back up to 25 percent after a slight drop in April, Smith said. New home market share in terms of overall closings in May 2024 was also 25 percent, making the 2024 average 27 percent, matching what Home Builders reported for 2023, Smith said.
The median new home closing price for all product types was $491,995 in May, a 6 percent increase from May 2023. The median new home closing price for single-family detached products was $522,890, up 2 percent from May 2023, Smith said. For attached product types, the May 2024 new home median closing price was $389,951, 7 percent higher than May 2023.
Builder land closing activity in May was minimal as only one purchase of vacant land closed, Smith said. Toll Brothers added 20 acres in the northern portion of Lake Las Vegas in Henderson.
The remainder of the builder activity were lot take downs within existing communities as well as a handful of custom lots by Blue Heron and Christopher Homes in MacDonald Highlands, Smith said.