Market Update for Northern Virginia – July 2025

As of mid-July 2025, the Northern Virginia housing market continues to reflect a complex mix of buyer behavior, inventory trends, and broader economic influences. With new inflation data, updated housing statistics, and ongoing commentary surrounding mortgage rates, there’s much to unpack across the region’s 10 counties. Here is the Northern Virginia Market Update for July 2025.

Housing Market Overview

Median Sold Price
At the end of June 2025, the median sold price for homes in Northern Virginia was $720,000. This represents a 1.7% decrease from May and a 0.7% drop year-over-year. While not a dramatic decline, it indicates a softening in pricing compared to the spring market.

Home Sales Activity
A total of 3,230 homes were sold in June, up 2.3% from the previous month and 6.6% compared to June 2024. This increase suggests a healthy pace of transactions, supported by active buyers despite current market conditions.

Days on Market
The average number of days a home remained on the market before going under contract rose to 19 days, up four days from May and six days from the same time last year. While homes are still selling at a relatively steady pace, the trend points to buyers taking more time in their decision-making process.

Inventory Levels
There were 4,290 homes for sale at the end of June, reflecting a 5% decline from the previous month, but a notable 50% increase from June 2024. This year-over-year jump underscores the recovery from the historically low inventory levels seen in 2023 and early 2024.

Listing Activity and Buyer Demand

While inventory levels are up significantly year-over-year, new listings in June were down 15.3% from May and 1.6% lower than June of last year. The drop following the spring surge is not unexpected, but it emphasizes the need for continued listing activity to match growing buyer demand.

Buyer demand, based on showing activity tracked by Bright MLS, continues to be location-sensitive.

• Closer-in jurisdictions like Arlington and Alexandria remain high in demand due to their proximity to Washington, D.C.
• Loudoun County shows a split market, with eastern communities seeing stronger interest than the western rural areas.
• Prince William County also reflects this trend, with areas such as Woodbridge and Manassas experiencing higher demand than other parts of the county.

This hyper-local nature of buyer behavior highlights the importance of analyzing the market not just county by county—but neighborhood by neighborhood, and in some cases, street by street.

Economic Factors

Economic indicators continue to influence the housing market outlook.

CONSUMER PRICE INDEX

The Consumer Price Index (CPI) rose to 2.7% year-over-year in the June report, up from 2.4% in May. This uptick in inflation may cause the Federal Reserve to delay any anticipated interest rate cuts, with analysts suggesting that any policy adjustments could be pushed to September after the typical August recess.

MORTGAGE INTEREST RATES

Mortgage rates remain relatively stable, fluctuating between 6.7% and 6.9%.

• The lowest point in 2025 was in March at approximately 6.5%.
• The highest rates peaked in April, reaching above 7%.

Despite the Fed cutting rates several times in the past, mortgage rates didn’t necessarily follow, highlighting the complexity of market reactions. As a result, many buyers are learning to operate within the current rate environment.

Buyer Behavior and Market Outlook

Active buyers today are more selective. They tend to prioritize homes in excellent condition, with minimal repairs needed, and with strong visual appeal from the start. As a result, homes that are priced correctly and show well continue to perform strongly. However, a portion of the buyer pool has stepped back from the market, opting to wait until conditions—particularly interest rates—change.

Open houses remain well attended in many areas, and buyer interest is still strong across the region. Despite it being mid-summer, market activity has not slowed significantly, and many industry professionals agree that waiting for a “fall market” may mean missing out on current opportunities.

Final Thoughts

The July 2025 housing market in Northern Virginia is defined by subtle price softening, increased sales activity, and stabilizing mortgage rates. While inflation and economic policy may shift the outlook in the coming months, the current environment presents opportunities for both buyers and sellers—provided they understand their local market conditions.

BOTTOM LINE

As always, real estate remains a local business. For those considering a move, strategic preparation and market insight are key to making the most of this evolving summer season.

Questions/Concerns? Please contact me.

Denise Fuller, Real Estate Specialist