Va. Realtors: Home sales to increase 9.8% in 2025

Virginia Realtors forecasts a 9.8% year-over-year increase in home sales in 2025, according to its 2025 Economic & Housing Market Forecast, released Thursday.

So far this year, housing sales in the state are outpacing sales last year (although the pace of sales is below the annual average) and are on track to be up 2.9% annually by the end of the year, according to Virginia Realtors’ forecast.

“We have a lot of pent-up demand in our housing market here in Virginia,” Virginia Realtors Chief Economist Ryan Price said in a statement. “The supply gains we’ve seen so far in 2024 are likely to continue into 2025, bringing more active listings out in the market. …

“This will provide that pent-up demand with more options to choose from,” he added. “Couple this with lower mortgage rates, and we’re likely to see Virginia’s sales activity pick up in 2025.”

Home prices will likely rise at a slower pace next year than they have in 2024, according to Virginia Realtors, because the association expects the growth of home prices to moderate and for new housing to ease supply constraints.

By the end of this year, Virginia Realtors predicts the annual median home price will have risen by 5.1%. The trade association projects the commonwealth’s annual median home price in 2025 will rise 3.4% over 2024.

“The supply-demand imbalance remains a factor, putting upward pressure on home prices,” Sejal Naik, deputy chief economist for Virginia Realtors, said in a statement.

New housing starts — new residential units that construction work has begun on — will increase 2.6% year-over-year in 2025, according to the forecast. Single-family and townhome starts will likely drive the growth in new housing starts, as multifamily projects wane. By the end of 2024, new housing starts will have declined 9.1% year-over-year, according to the forecast.

Thirty-year mortgage rates will end 2024 in the low 6% range, around 6.10%, and drift down to 5.75% by the end of 2024, according to Virginia Realtors projections. That decrease could make homes more affordable for buyers and also help remove the “lock-in effect” for homeowners who have delayed their next home purchases because of high mortgage rates.

Virginia Realtors’ forecast also includes labor market predictions. In 2025, the number of jobs in Virginia will increase 1.2% over 2024 — an addition of 51,000 jobs. By the end of 2024, Virginia will have added 79,000 jobs, a 1.9% year-over-year increase, according to the forecast.

By the end of 2025, the association predicts the state’s fourth-quarter average unemployment rate will increase from 2.8% (the August 2024 rate according to the U.S. Bureau of Labor Statistics and Virginia Realtors’ projected fourth-quarter average) to 3.2% “due to weaker economic conditions across the country.”

Based in Glen Allen, Virginia Realtors represents more than 35,000 Realtors and is the state’s largest trade association.