Nevada Has the Third Lowest Mortgage Rates in the Country

Nevada Has the Third Lowest Mortgage Rates in the CountryAnyone shopping for a home in the last couple of years in Las Vegas or around the country for that matter has had at least a small concern over where mortgage interest rates are. Some buyers are understandably wondering why they didn't jump on a home purchase in 2020 or 2021 when rates plummeted because they are now higher than they have been in over a decade. 

Homebuyers should not be too hard on themselves, there is no way to predict what mortgage rates are going to do. But there are some ways that you can get a little bit better rate when purchasing a home. Mortgage rates can vary slightly depending on many factors. What some buyers may not realize is that one of those factors is location. That's right, mortgage rates vary by state. Why is this?

The Difference in Mortgage Rates Across the USA

Though there is a lot of real estate information that can be studied and learned on a broad nationwide level, learning about real estate is most helpful when looking at a smaller more localized level.

Vickie Davies of The Knieper Team shares this in a blog post about local markets:

"Waiting for a real estate market crash and for home prices to come down might not be the best Granbury homebuying strategy. This is because you have to take into account the actual real estate market factors, especially in your local area."

A real estate company that works with several lenders nationwide analyzed the different mortgage rates by state across the country and found that location does play a significant role in the average mortgage rate offered to homebuyers. 

Upon analyzing more than 100 lenders in America on their average offering for a traditional 30-year fixed-rate mortgage and searching at rates regardless of a borrower's credit score it was discovered that some locations offer lower rates than others. The lowest rates were found in Hawaii with an average of 6.49%, while the highest was discovered in Vermont at an average of 6.88%. This is not a huge difference, but it does make a significant impact on the cost of purchasing a home. 

For example, if a buyer were to purchase a $400,000 home making a 20% down payment a home in Vermont would demand a $2,103 monthly payment for 30 years to pay off the home. That same home in Hawaii would demand a $2,020 monthly payment. While this doesn't seem huge on a monthly payment difference (though significant) it would end up costing a home buyer $30,000 over the life of the loan. 

Why Mortgage Rates Vary by State

Why are offered mortgage interest rates different from state to state? Rates vary for several different reasons. Some of the most pertinent are a borrower's personal financial health criteria. The research did find that buyers in different locations around the country had differing average financial factors. What they also found is that some locations have more lending agencies than others. The more lenders in an area, the more competition between them and the higher likelihood of grabbing a better rate. 

Another factor found to push mortgage interest rates was legal and regulatory factors imposed on the real estate market in those states. One factor that had a significant impact on mortgage rates was the state foreclosure process. States with a judicial process on foreclosure where a lender is required to file a lawsuit to foreclose on a home. Lenders charge a higher risk premium on a mortgage. This is because it costs a lender more to foreclose on a home in that state if they need to. 

States with nonjudicial foreclosure proceedings offered lower mortgage interest rates to their home buyers. This is because the process of taking back a property is much easier and more predictable for a lender and costs less money. 

Nevada ranked as the state with the third lowest mortgage rates in the country. Experts speculate that this could correlate with the non-judicial process of foreclosure.  It is only surpassed in best mortgage rates by the states of North Dakota and Hawaii. 

Nevada is a Great Place to find an Affordable Home

If you are financially stable and ready to purchase a home, buying one in Las Vegas is more affordable than other areas around the country. This is partly due to the fact that lenders in Nevada are offering some of the lowest mortgage rates in the country, and partly due to lower home prices. 

Purchasing a home should always be done with the utmost research and financial health under your belt. Buying a home in Las Vegas within your comfortable affordable budget could get you more house than other locations.

If you are interested in purchasing a Las Vegas home, I am here to help. Contact me any time to get started on your Las Vegas home-buying adventure. I am an expert in all greater Las Vegas area real estate and would love to talk about your home-buying goals and get you into a Las Vegas home you will love. 

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