Home Listings in One State Hit Three-Year High

Virginia's housing market saw more homes on the market for sale in February, with buyers seemingly powering through elevated prices and high mortgage rates, according to the state's largest realtors association.

New listings in the state soared by nearly 17 percent last month compared to the same time a year ago. Meanwhile, active listings are also up by about 10 percent. The availability of homes for sale appears to meet demand with sales rising by 3.5 percent, contributing to volumes of $3.2 billion, an 11 percent increase from 2023. The outlook appears optimistic as the market enters the busy spring season, with pending sales—which tend to be a forward indicating signal—also up 8 percent, data from Virginia's realtors association shows.

"More sellers are listing their homes as reflected by the largest increase in new listings in
nearly three years," realtors said. "This could reflect a combination of pent-up demand from move-up buyers and an improvement in mortgage rates from Fall 2023 levels. If this trend holds, it could open up the potential for more sales volume in the coming months."

Buyers are braving through high prices in Virginia. The median sale price was up nearly 4 percent to about $385,000. This comes at a time when mortgage rates are closer to 7 percent, making it quite expensive to pay for monthly home loans outlays for buyers. As of March 28, the Freddie Mac average 30-year fixed rate mortgage hit 6.79 percent, slightly down from the previous week's 6.87 percent. But it was higher from a year ago, when the interest rate for a home loan was at 6.32 percent.

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"Activity in Virginia's housing market picked up in February compared to a year ago. There were more sales and also more pending sales. Home prices continue to climb in most parts of the state," realtors in Virginia said. "The inventory of active listings is growing, and more new listings came onto the market, signaling renewed interest from sellers/move-up buyers. Despite the additional listings, the overall inventory remains tight and market conditions are still very competitive."

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More than half of Virginia's counties and regions saw the pace of sales pick up compared to a year ago.

The I-81 corridor in western parts of the state, areas in Winchester, Harrisonburg, and Staunton regions, saw the most activity along with the Roanoke and New River Valleys, the realtors association pointed out.

"The Greater Piedmont region, the Martinsville area, and Hampton Roads are among the places where sales have lagged so far compared to last year," they added.

Prices, which were up more than $14,000 last month compared to a year ago, are also seeing a rise in how much sellers are getting for their homes. While, on average, homes are selling at a tick lower than their listing prices, the average sold-to-list ratio was up slightly.

"Upward pressure on prices is evident as all homes priced above $400,000 sold for above asking price on average," realtors in the state said.

Most of the homes sold in the state tended to be priced in the range of $200,000 to $400,000. But even at the higher price range, such as the $800,000-plus market, buyers were showing up. That segment accounted for more than 11 percent of sales from a year ago, which represented a nearly 9 percent jump of all sales compared to February 2023.

"Upward pressure on home prices has been consistent in housing markets across the
commonwealth so far in 2024," the state's realtors said. "The pent-up demand remains strong and inventory levels, while improving, are still tight. This will likely keep the market competitive heading into the spring, and prices will remain on an upward trajectory in most regions in Virginia."