According to Virginia Home Sales Report March 2022 published by Virginia REALTORS®Although the spring market got off to a good start, there are signs that market conditions are changing.
Statewide, there were 11,446 home sales in March 2022, down 6% from a year ago. This drop is due to the fact that last year was an exceptionally busy market and also to the very low inventory which offered very few options to buyers.
In March, the median home sale price in Virginia was $375,000, nearly 12% higher than March of last year. While year-over-year sales have slowed, Virginia saw a significant increase of more than 40% in sales between February and March 2022. This increase reflects typical seasonal trends in the housing market; however, this year it was likely also fueled by the recent spike in mortgage rates.
In recent weeks, rates have risen faster than they have in nearly 30 years. During the second week of April, the average rate for a 30-year fixed rate mortgage hit 5% for the first time in 11 years.
“Mortgage rates are rising faster than expected and will likely rise further through the year,” says Virginia REALTORS® Chief Economist Ryan Price. “Many buyers are eager to purchase a home before rates rise further.”
In Virginia, supply remains historically low; inventory is now less than a third of what it was five years ago. Intense competition caused homes to sell for 2.6 per cent above list price, on average, in March. This is the highest average monthly ratio of selling prices to the list in at least a decade.
While these numbers may discourage potential buyers, there are signs that supply is expanding. In March, Virginia’s inventory expanded with an increase in new listings and a slight slowdown in buyer activity. At the end of March, there were approximately 1,500 additional active registrations statewide in Virginia, an increase of 12.1% from the end of February.
“Virginia’s inventory of homes for sale is likely to grow in the coming months,” says Virginia REALTORS® 2022 President Denise Ramey. “Many sellers are feeling the pressure of rising mortgage rates, which will lead some to put their homes up for sale now, before higher rates lead to lower interest from buyers.”
The Virginia Home Sales Report is published by Virginia REALTORS®. Click here to view the full March 2022 Virginia Home Sales Report.