Strong housing market predicted for 2025

The housing market in Northern Virginia will continue to show strength in 2025, the Northern Virginia Association of Realtors reports.

A forecast released Dec. 17 by NVAR conducted in conjunction with George Mason University’s Center for Regional Analysis predicts moderate price increases and higher levels of market activity.

“We’ve seen Northern Virginia’s housing market improve during the last few months, and we expect that trend to continue into 2025,” said NVAR CEO Ryan McLaughlin. “In fact, monthly sales growth in our regional market has 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,” McLaughlin said.

Lawrence Yun, chief economist at the National Association of Realtors, predicts a 9 percent increase in home sales in 2025 across the nation, with mortgage rates stabilizing at 6 percent.

The NVAR report includes these predictions for Fairfax County:

• Single-family home prices are expected to rise 1.5 percent during 2025.

• Total unit sales for single-family homes are forecast to increase 5.7 percent in 2025 compared to 2024. NVAR calls that “a welcome change after several years of tightening inventories.”

• The inventory of townhomes is forecast to increase 6.0 percent, creating a slight increase in the supply of relatively affordable options for buyers.

• Strong demand for townhomes, due to their relative affordability compared to single family homes in recent years, is set to continue into 2025 with unit sales rising 2.9 percent and pricing going up 3.9 percent compared to 2024.

• Condominium prices will be up 3.5 percent from 2024 to 2025, a slight slowing of price increases recorded in recent years.

• As demand for condos begins to wane somewhat, inventory is set to increase by 3.6 percent from 2024 to 2025.

“In the Northern Virginia region, working families are finding it increasingly difficult to find housing they can afford,” said Terry Clower, director of GMU’s Center for Regional Analysis. “This November, a total of 1,168 homes sold in the region, a 10.8 percent increase from last year.

“That’s good news,” Clower said. “But the region’s median home price also rose 6.6 percent to $699,900, compared to what housing cost in November 2023.”