NVAR Predicts 2025 Northern Virginia Housing Market Will Continue to Strengthen With Higher Levels of Market Activity and Growth in Housing Inventory

Forecast Conducted with George Mason University’s Center for Regional Analysis

FAIRFAX, Va.--(BUSINESS WIRE)--The Northern Virginia housing market will continue to strengthen with moderate price increases and higher levels of market activity, according to a NEW economic housing forecast released December 17, 2024, by the Northern Virginia Association of Realtors® in conjunction with George Mason University’s Center for Regional Analysis.

“We’ve seen Northern Virginia’s housing market improve during the last few months, and we expect that trend to continue into 2025,” said Ryan McLaughlin, CEO of NVAR. “In fact, monthly sales growth in our regional market have outpaced the national housing market several times this year. The unknown is how the new administration’s proposed policies might impact the local economy, but, overall, we expect an improved housing market next year.”

Northern Virginia’s outlook is similar to the national 2025 housing forecast that predicts the worst of the housing inventory shortage is ending, mortgage rates are stabilizing, and job additions are continuing according to the National Association of REALTORS®. Dr. Lawrence Yun, NAR’s Chief Economist, says that nationally there will be a 9% increase in home sales in 2025, with mortgage rates stabilizing at 6%.

“In the Northern Virginia region, working families are finding it increasingly difficult to find housing they can afford,” said Terry Clower, PhD, Director of GMU-CRA. “This November, a total of 1,168 homes sold in the region, a 10.8% increase from last year. That’s good news. But the region’s median home price also rose 6.6% to $699,900, compared to what housing cost in November 2023.”

Other hopeful signs for the region’s economy and housing:

• Most markets will see more moderate price gains than in 2024, closer to 3%, with some higher levels of increases in tight markets — such as single-family homes inside the Beltway.
• Sales activity will increase with modest improvements in the region’s inventory.
• While still below pre-pandemic levels, most market segments in the region will see more homes for sale as move-up purchasers re-enter the market.
• Stability in mortgage rates will support higher levels of sales, as the market acclimates to higher, but more historically normal mortgage rates.

But there are still some undetermined factors that may affect the region’s housing market. The promises made by the incoming administration during the presidential campaign may have an impact on the Northern Virginia housing market, which is a large submarket of Washington, D.C. The timing and magnitude of any government policy changes are unclear at this time.

McLaughlin and Dr. Clower were two of the expert panelists featured on NVAR’s virtual briefing along with Casey Menish, 2025 NVAR President, and Thai Hung Nguyen, NVAR’s 2024 President.

NVAR’s 2025 Housing Forecast includes Alexandria City and Arlington, Fairfax, Loudoun, Stafford, and Prince William Counties. For a recording of the forecast and statistics and charts for each area’s (Arlington, Alexandria, Fairfax, Loudoun, Stafford and Prince William) single-family, townhouse and condominium units, visit NVAR online at www.nvar.com.

To compile the forecast, NVAR convened a panel of key experts from differing sectors of the real estate industry to review preliminary forecasts developed by GMU-CRA economists and offer their insights into current and near-future market conditions. This report is the result of that collaboration.