Buy now or wait a year? Running the actual numbers

We have run this experiment before

In 2021 buyers were getting 3% mortgage rates. By the middle of 2022 those rates had roughly doubled, and the consensus view was obvious: rates up, so prices must come down. Wait it out.

Prices did not come down. Over that same stretch the Las Vegas REALTORS median climbed to around $450,000.

The people who waited did not just end up with a higher interest rate. They even paid more for the house.

That is one cycle rather than a law of nature, and it is worth saying so plainly. But it is the most recent time this exact decision was put to a large number of buyers, and it went badly for the people who waited.

Why prices didn't fall when rates doubled

This is the part that defeated everybody's model in 2022, and understanding it matters more than the history does. Three things held the floor up.

Builders stopped flooding the market

Before 2008, Wes puts new construction at around 20,000 homes under way at once. Mountain's Edge is the artefact of that era: enormous master-planned communities built without much regard to demand, because in 2005 and 2006 anything you put up sold.

That model is gone. Builders are releasing in small numbers now — his framing is that where a builder once did 3,000 homes, they might do 30. Land costs more, and the deliberate strategy is to hold supply tight enough that prices do not swing. Fewer buyers arrived, but fewer homes arrived too.

What that means if you are buying new rather than resale is covered in new construction vs resale.

Population kept growing anyway

Demand did not disappear, it thinned. Las Vegas continues to draw people in, with a steady flow from higher-cost western states where the same money buys considerably less house. That price differential is the engine, and it does not care much what rates are doing. The comparison that drives it is in why California homeowners are moving to Las Vegas and what $400,000 buys across the West.

Owners have equity this time

The 2008 collapse ran on negative equity. Hundred-percent financing was routine, so when values fell, walking away was a rational financial decision for a very large number of people, and the resulting supply fed on itself.

Anyone who bought in 2021 or earlier is sitting on a substantial equity cushion. People in that position do not fire-sale. They wait, or they do not sell at all, and inventory stays tighter than a demand-only model would predict.

Wes's stated speculation, and he labels it that way: he does not expect a 2008 repeat, because the inventory simply is not there, and the market has now carried more than four years of elevated rates without breaking.

The second scenario, and this is the one that matters

The first comparison ignores something sitting on the table right now. In this market, sellers are paying.

Same $500,000 purchase, but with a $15,000 seller contribution — closing costs, a rate buydown, or a mix.

The logic behind stripping out the concession is the important part. Seller concessions exist because demand is soft. The moment rates drop to 6%, demand returns — and with it the question of whether any seller still needs to contribute anything.

We have the evidence from earlier this year. When rates got into the high fives, the market was busy, and concessions thinned out accordingly. Events later in the year pushed rates back up and the negotiating room returned.

As if we buy a year from now, there's a good likelihood you won't have this contribution.

So the realistic version of waiting is not "same deal, lower rate". It is a higher price, a lower rate, and no help from the seller.

The tax angle, stated properly

If you are renting while you wait, there is one more line in the comparison. Mortgage interest is deductible, and early payments are overwhelmingly interest, so a loan of this size throws off roughly $29,000 to $34,000 of deductible interest in year one.

Three qualifications belong with that number, and the video does not include them:

• A deduction cuts taxable income, not tax owed. It is worth your marginal rate applied to it, not its face value.
• It only helps if you itemise. You get the standard deduction regardless, so the real benefit is the amount by which your itemised total exceeds it.
• At these loan sizes, itemising will often win — $30,000-odd of interest plus property taxes clears most standard deductions comfortably. So the benefit is real. It is just smaller than "deduct $20,000" makes it sound.

This is a question for a CPA looking at your actual return, not a line in a buying decision.

Disclosures

The scenarios on this page are illustrative models built on stated assumptions — a 6.75% rate today, 6% in twelve months, and 3% annual appreciation. None of those is a forecast and the conclusion changes if any of them does. Rate figures describe market averages and modelled examples, are not offers or quotes, and no annual percentage rate was stated in the source. Payment figures cover principal and interest only.

Price and rate history is attributed to Las Vegas REALTORS as cited in the source video. The ten-year comparison uses annual averages rather than current figures. Builder volume figures and the share of files carrying seller concessions are the speakers' own characterisations and one lender's book respectively, not published market statistics.

Nothing here is financial, tax, legal or lending advice. The mortgage interest deduction depends on your filing status, whether you itemise, your marginal rate and applicable limits — speak to a CPA.

Wes Friedman is a mortgage adviser who appears regularly on the channel and would stand to originate a loan arising from a purchase. Jim Fong is a licensed Nevada real estate agent who would represent a buyer in the resulting transaction.