Home Prices Rise as Inventory Remains Low

Mortgage Rates are Increasing

VIRGINIA BEACH, Va. (April 2022) – Reflecting the competitiveness of the local real estate market and the continuing lack of inventory, the median sales price (MSP) of homes in Hampton Roads hit $300,000 in March – matching the region’s record high set in July of last year.

According to data compiled by the Real Estate Information Network, Inc. (REIN), that represents a month-over-month MSP increase of 3% and a year-over-year increase of 9%.

“I don’t think anyone will be surprised that home prices have risen again,” said Liz Moore, President of REIN’s Board of Directors and Owner/Broker of Liz Moore & Associates. “Inventory is well below where it was last year, while demand remains strong. I think there are buyers who are desperate to get a home before mortgage rates climb any higher than they already have.”

According to Freddie Mac, the average 30-year fixed mortgage rate on March 31, 2022 was 4.67%. That’s 1.59 points higher than the 3.08% average the agency reported for March 2021.

“I expect residential inventory to remain low for the foreseeable future,” Moore said. “What’s unknown is how quickly and by how much interest rates will rise. Rising interest rates could price some would-be buyers out of the market.”

Not surprisingly, the median number of days homes in Hampton Roads remained on the market in March was just seven.

  • Active residential listings for March totaled 2,794. That’s down 21% year-over-year from 3,552, and down 59% from 6,820 in March 2020.
  • Settled residential sales for March were 3,050, down slightly year-over-year from 3,126, but up 13% from March 2020 when there were 2,653.
  • Despite the continuing inventory crunch, the Months’ Supply of Inventory for residential properties increased slightly month-over-month to .88, up from .78 in February. However, the MSI in March 2021 was 1.21 and it was 2.70 in March 2020.
  • Pending residential sales in March stood at 3,370, down by just .3% year-over-year, but up 14% from March 2020.
  • New residential construction sold through the MLS totaled 319. That’s down year-over-year from 355.