Housing

Housing Affordability

Federal housing authorities have suggested that 30 percent of a household's income is the threshold under which housing is affordable. When housing expenses are greater than 30 percent, saving for future needs is significantly reduced or eliminated, and meeting basic needs with the left-over income becomes more difficult. The risk of foreclosure for homeowners also becomes higher.

Source: American Community Survey (ACS), Single-year estimates; Confidence level: 90 percent

36.5%

Households that spend 30% or more on housing expenses in Clark County in 2019

34.6%

Households that spend 30% or more on housing expenses in Nevada in 2019

30.6%

Households that spend 30% or more on housing expenses in the U.S. in 2019

Share of households burdened by housing expenses in Southern Nevada sees slight improvement, still above state and U.S. rates

More than one-third of households in Southern Nevada spent more than 30 percent of their income on housing-relating expenses in 2019, down 12 percent (and 5 percentage points) since 2012. However, Southern Nevada rates remain above state and national levels, both of which experienced similar greater improvement since 2012.

When differentiating between renters and homeowners (see graphs below ), stark differences appear, both in terms of rates and trends since 2012.

Source: American Community Survey (ACS), Single-year estimates; Confidence level: 90 percent

Source: American Community Survey (ACS), Single-year estimates; Confidence level: 90 percent

The share of renters that are cost-burdened in Southern Nevada hasn't changed much since 2012. Even as economy has recovered and median household income has climbed, roughly half of households that rent spend 30 percent or more of their income on housing expenses.

An increasing population and employment growth in the region has driven demand up in the rental market over the past few quarters. As a result, multifamily rents surged through most of 2019, hitting their highest level in more than a decade. While rates were expected to continue to increase in 2020, the COVID-19 pandemic caused the metro's average rent to drop slightly.

Homeowners are much less burdened when compared to renters, and conditions have been improving since 2012. The share of homeowners in Southern Nevada for whom housing expenses exceeded 30 percent has dropped by 29 percent (and 9.6 percentage points) since 2012, hitting a decade low in 2019. This improvement occurred even while home prices in the region increased faster than nearly anywhere in the country over the past few years. 

The National Association of Home Builders (NAHB) Housing Opportunity Index (see chart at right) measures the percentage of home sales that would be affordable to the median income family.

In 2019, roughly 46 percent of the homes sold in Southern Nevada were affordable to a median income family. This was an improvement from the year prior , when only half of the homes sold were affordable. 

Nationally, approximately 56.3 percent of homes sold in 2019 were affordable to a median income family.

Source: National Association of Home Builders (NAHB) Housing Opportunity Index