Page 15 - 2016 Las Vegas Residential Real Estate Report

S&P/CASE-SHILLER HOME PRICE INDEX –LAS VEGAS & CME MID-MARKET CONTRACT QUOTES–
Source: S & P Dow Jones Indices, Chicago Mercantile Exchange
SINGLE-FAMILY VACANCY RATES –ESTIMATES–
Source: Clark County Comprehensive Planning
INTEREST RATES
5,000 YEAR LOWS
Although interest rates being at 5,000 year
lows sounds like a made up headline, a speech given by Andrew G Haldane (2015) of the Bank of England reveals an interesting history of interest rates. Collected using a multitude of sources, Homer and Sylla (1991), Helm and Mirowski (1987) and many ancient compilations, the composite trend of all of these collected gures illustrates no better time to borrow
money than today. It’s also a challenge to make money, with large depositors in some countries paying to have their money in a bank, literally negative interest rates.
Built to encourage people and rms to spend by discouraging savings, negative interest rates present a pioneering territory that is not very conducive to forecasting. Further, some schools of thought believe that this actually encourages malinvestment, a term that means mistaken investment, or wasted, poorly allocated capital. One thing is for sure, nobody can explain how this will play out.
Zooming into the relatively “short” time frame between the 1970’s and today, we can see that
in the U.S., mortgage interest rates are also at historically low levels. Despite the recent bump in December, potential homeowners can still access the mortgage market at some of the cheapest levels in well, human history.
Source: Federal Reserve, Clark County Assessor, GLVAR
Haldane, A. G. (2015, March 27). On microscopes and telescopes. Speech presented at Lorentz centre workshop on socio-economic complexity in Netherlands, Leiden.
30-YEAR FIXED MORTGAGE –INTEREST RATES–