Virginia’s 2017 Housing Market Starts with a Strong January

Virginia’s 2017 residential real estate market is off to a strong start. January performance showed notable year-over-year improvement. Pace, or the total number of transactions, rose from January 2016 by 6.5 percent (from 5,946 transactions to 6,335). Likewise, January volume grew year-over-year, from $1.800 billion in 2016 to $2.005 billion in 2017. The 11.4 percent increase in volume is attributed to both rising sales numbers and rising median price. Statewide, median price for January 2017 rose 3.2 percent from January 2016, from $247,000 to $255,000. Typical of industry seasonality, January sales pace and volume fell from December, but less so than from December to January last year. Virginia’s historical trends indicate that sales climb every month from January to June as they reach summer’s market peak. Along with declining days on the market, the 3.2 percent year-over-year increase in median price (from $247,000 to $255,000) indicates strong, sustained buyer motivation. Average days on the market declined year-over-year from 86 to 77 (10.5 percent). The average 30-year fixed mortgage interest rate for January 2017 dipped slightly to 4.15 percent after spiking at year’s end. Though the Federal Reserve Bank deferred raising the key rate in January, the prospect of rising mortgage rates may propel buyers into the market while financing remains historically affordable.

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