Growing Interest Rates Don’t Deter Luxury Home Sales

Overall, 2022 is bringing more positive results than the last two years. The Las Vegas Review-Journal reports that new home construction slowed during the first half of 2022, but Las Vegas-based Home Builders Research reported 235 closings of homes $1 million and higher, rising 16% over the 203 in the first six months of 2021. But even with this growth, builders are seeing that buyers are still cautious about purchasing. That rise in closings is partially due to the increased cost of construction that pushes sales prices higher, but it’s also a continuing desire for luxury homes, especially for those relocating from California.

There were 52 such luxury new-home sales during the first six month of 2017; 87 in 2018; 123 in 2019 and 115 in 2020, when the housing market briefly paused at the start of the COVID-19 pandemic.

The number of luxury new-home sales even picked up during the second quarter of April through June, even when interest rates started to rise and fear of a potential recession increased. There were 134 closings in the second quarter, up from 101 between January and March. In 2021, there were 112 luxury closings in the second quarter after 91 in the first quarter.