While national headlines may paint an uncertain picture right now, the local real estate market in Central Virginia is showing encouraging trends. February’s housing data indicates rising inventory, increasing home values and a more balanced number of days on the market – key indicators of a healthier market.
One major factor influencing the strength of this spring’s market is the 30-year fixed mortgage rate, which has recently improved. As of this writing, rates are hovering around 6.5%. While still higher than the historic lows of 2021, a drop from 8% to the mid-6% range makes homeownership more accessible. Homeowners who have held onto their 3% mortgage rates may now be more willing to move, increasing both inventory and sales activity.
To put this into perspective, a homebuyer who purchased in July 2021 for the average price at the time of $260,800 with a 3.15% interest rate and 20% down had a monthly mortgage payment of around $1,200, including taxes and insurance. Today, that same average homebuyer would pay approximately $2,000 per month at current rates for that same home – illustrating why many homeowners are hesitant to sell. However, it also highlights how homeownership builds long-term financial stability.
Since 2018, local home values have increased by 70%. Homeowners who bought years ago are now paying significantly less per month for their housing than those buying or renting today. Unlike rent, which rises annually, a fixed mortgage locks in costs, allowing homeowners to pay yesterday’s prices in tomorrow’s market. While buying a home is a major financial decision, it remains one of the most effective ways to build wealth over time. If interest rates continue to improve, we can expect increased inventory and home sales as we enter the prime spring market.
If you’re considering buying or selling, now is the time to plan your next move. Take a moment to connect with your Realtor and discuss your real estate goals!
Billy Morris is the 2025 president of the Lynchburg Association of Realtors and an associate broker at John Stewart Walker, Inc.