Higher interest rates continue to weigh on Northern Virginia real estate market

A miniature house with a key (via Tierra Mallorca on Unsplash)

The continuation of higher mortgage rates put a damper on Northern Virginia home sales in September, which were down 18.2% compared to a year earlier, according to the Northern Virginia Association of Realtors.

That decline was worse that August’s year-over-year decline of just 12.4% and reversed a trend of an improving market that had been seen since the spring.

Mortgage rates are ranging from 7% to 7.5%, according to the Realtors’ group. Sales were down 23.1% from August and the total of 1,180 was significantly below the five-year average of 1,685 units for September.

“It’s a challenging market for borrowers and buyers, especially first-time home buyers,” said NVAR Board Member Jamie DeSimone of Keller Williams Capital Properties. “The increase in interest rates is a primary deterrent for buyers and would-be sellers. Current homeowners have no incentive to forgo their lower interest rate unless they are forced to move. That’s why homebuying options are scarce.”

Inventory in September averaged 1.22 months, down 1% from September 2022 and down from the five-year average of 1.3 months. In good news, September’s inventory figures were a bit higher than August, when inventory stood at 1.08 month’s supply.  On average, homes stayed on the market for 17 days in September, down 32% from the previous September, when the average was 25 days on the market.

The tight supply continued to push prices up. The median sold price for a home in September was $650,000, up 5% from September 2022. The five-year average for median sold price in September is $594,028.

“We’ve been experiencing the ‘ouch factor’ as high mortgage rates have chilled the market. With the resulting limited inventory, sellers choosing to list their homes are receiving multiple offers and have leverage over buyers. The market remains competitive, as there are more people who want to buy than there are homes to sell,” said NVAR CEO Ryan McLaughlin.

The NVAR report covers Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton.

Other highlights from the September report:

  • Total sold volume: $868.9 million, down 14.4% compared to September 2022.
  • Average sold price: $738,772, up 6% from September 2022.
  • Number of active listings: 1,661, down 29.8% from September 2022.
  • New pending sales: 1,220, down 12% from September 2022.

Specific information for each jurisdiction in September is below:

Housing market statistics for Northern Virginia in September 2022 vs. 2023

Photo via Tierra Mallorca on Unsplash. This article was written by FFXnow’s news partner InsideNoVa.com and republished with permission. Sign up for InsideNoVa.com’s free email subscription today.

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