All Reno/Sparks Market Update – 3/8/2025
30-Year Mortgage Interest Rates: 6.375% (6.409% APR)
What does this all mean?
The short answer is: Expect Home Prices to continue to increase between 5% to 7%. If mortgage interest rates go down to the 5%’s (probably not till very late 2025 or 2026), Home Prices could go up alot, like over 20% which we saw in 2021 vs 2020! When will home prices go down? Maybe in late 2026 if we get a big increase in housing supply. There’s a cool short article below about the changes taking place in Reno/Sparks and how they could affect our Reno/Sparks Real Estate Market.
Here’s an overview of the driving factors to our Reno/Sparks Real Estate Market:
- February/March 2025 – The Tesla Semi Truck Factory is just about complete and installation of presses and robotics will start. In addition, there will be 5000 employees needed to run the production lines. The addition of well paid employees will boost Real Estate Buying in the Reno/Sparks Market. Here’s a pretty cool video Tesla about the Semi Truck Factory.
- Tesla increases the production lines at Nevada’s Giga-Factory 1 and will build the new 4680 battery. It’s estimated to add 1,600 new jobs to the facility. Estimates are unclear as to when this expansion project will start and be completed.
- Tariffs – With the Tariffs starting in February 2025, we will probably see prices start to increase in many categories. These price increases will be considered inflation and the 10-Year Treasury Bond Yield will probably go up, which will cause 30-Year Mortgages to increase. Higher interest rates means less buyers for the Real Estate Market.
- LA Fires – A most unfortunate disaster. Over 10,000 homes have been destroyed and with that there will be many challenges for LA Residents:
- Home Insurance Rates will increase for the LA area as it will be classified as a high risk area.
- Many Insurance Companies will refuse to insure homes in the LA area.
- Homeowners that have lost their home in the fire will probably receive a check for their losses. They will need to decide if they will rebuild or move to a new location. The #1 Destination for Californians is Texas. #2 is Nevada, and Reno has many positive aspects to consider. Reno/Sparks will probably see an increase of Californians.
- Presidential Executive Order – Unleashing American Energy – This will hopefully bring energy prices down and thereby prices of goods in America. A possible great offset to the Tariffs.
Why are Reno/Sparks Median Sold Prices going up?
In spite of a pretty robust 30-year mortgage interest rate (6.375%), we’re still seeing Reno/Sparks buyers come to the closing table. Closed sales (Demand) was up 11.1% (611 transactions 2025 YTD compared to 550 transactions in 2024 YTD). Another interesting statistic is New Listings were also up 21.4% YTD 2025 vs YTD 2024. These statistics indicate that the Reno/Sparks housing market and economics continue to be strong.
- Nevada has the highest Unemployment Rate in the US (5.7% in December 2024), Reno/Sparks is still much better (4.5% compared to the US @ 4.0%). The physical building for the Tesla Semi-Truck Manufacturing Plant is pretty much complete and they are moving to Phase 2 which is building the robotics and manufacturing lines (3 to 4 lines) in the building. We’ll see a small reduction in the Reno/Sparks unemployment numbers when they go to full production.
- Lyten also announced plans to build the first lithium-sulfur battery gigafactory (A $1 Billion Plant) in North Reno. They’ve confirmed that they have secured Letters of Intent (LOI’s) to fund $650 million. If it goes into full operation in 2027 it will add over 1000+ new jobs to Reno. There’s still many more steps to take place before they can break ground. I’ll keep you posted as more information becomes available.
- People continue to move to Reno/Sparks. We have no personal state income tax, we’re new business friendly, we enjoy 4 seasons and there are lots of outdoor activities to enjoy including Lake Tahoe.
What’s going to happen going forward?
- Mortgage Interest Rates are predicted to stay in the high 6’s and low 7’s in the first 6 months of 2025.
Conclusions – The Reno/Sparks Real Estate Market is still a Seller’s Market, however, we are beginning to see a bit of a shift. Evident by the Months Supply Increase to 2.4 months. Definitely not like 2020/2021 when the market was a White Hot Seller’s Market and had a months supply of 0.7 months.
Reno/Sparks Economy
Conclusion/Predictions:
30-Year Mortgage Rates will remain in the high 6’s to low 7’s through the first half of 2025. How do we predict that? 30-year mortgage rates are based on the 10-Year Treasury Bond Yield and treasury bonds are based on the economy. However, not a lot of finance experts give predictions on the 10-Year Treasury Bond Yields, and Jerome Powell and the FOMC talks a lot about what they predict the economy will do in the future so that’s a pretty good indication of where 10-Year Treasury Bond Yields will go. Anyway…Jerome Powell and the FOMC believe the economy will be flat line for the first half of 2025, therefore if that’s true, 30-year Mortgage Rates will probably remain in the high 6’s and low 7’s for most of 2025.
BTW – this is all based on the premise that everything in our world remains constant and continues as normal. However, a trigger event can change our economy and housing market. This is important to know because a trigger event could happen. Here’s a bit of history on past trigger events.
Trigger Events:
- Economic Crisis – for example, in 1929, the stock market was greatly over-valued and when investors started to figure that out, there was a mass exodus out of the market which caused the Great Depression. Ok, there’s a bit more to it than just that. However, the Great Depression caused a huge drop (about 60% in value in some areas) in the Real Estate Market in the 1930’s.
- The next big “Trigger Event” for the housing market was in December 2007, when banks realized that a huge number of home loans were made to people that couldn’t make their payments when the loan adjusted to long term. That caused 3.1 million home foreclosures in just 2008. The Real Estate Market was flooded with homes for sale and in distress. Prices dropped dramatically (about 47% in Northern Nevada) and yes, there was a lot more to the Housing Market Crash than toxic mortgage loans, but that’s what basically happened.
- Are we headed for another Trigger Event in the residential real estate market? There would have to be a catastrophic trigger event or a combination of events. I.E. – war, recession, another health crises, major weather event/natural disaster to Reno/Sparks or something that may be new to the list of Trigger Events. The point being that it is unlikely that we’re going to see another huge drop in the Real Estate Market soon.
Disclaimer: This article/website contains forward-looking statements which are predictions and opinion based on data and information at a particular point of time. As data and information is updated and changes, the predictions and opinions can and will change. It is recommended that you always conduct your own research and base any of your investments and decisions on your finances on your own conclusions.