The Northern Virginia Association of Realtors® (NVAR), in partnership with the Center for Regional Analysis at George Mason University (GMU-CRA), issues a consensus forecast for the NVAR region’s housing market. The Association convenes a panel of experts from differing sectors of the real estate industry to review preliminary forecasts developed by GMU-CRA and offer insights into current and future market conditions. The following represents the forecast team’s mid-year update to the 2025 outlook.

With the job market starting to reflect the policies of the new federal administration, the region’s housing market is approaching a transition period. Federal employment has declined by roughly 20,000 since December 2024, and job declines in the Professional, Scientific, and Technical Services subsector that began in early 2024 have accelerated due to spending cuts initiated by the Department of Government Efficiency (DOGE). In short, the two sectors that the DC metro region has historically relied on to underpin the housing market have been declining. Despite these substantial declines, however, total non-farm payrolls have continued to increase, led in no small part by a boom in construction jobs in Northern Virginia. Thus, while there are mixed signs about the region’s near-term economic prospects, there are signs of economic resilience that include the potential to see economic growth in emerging technology sectors and a housing market that remains solid. Still, the impacts of federal job cuts, the potential for agency relocation, and reduced federal contract spending in some sectors are driving uncertainty for businesses and residents of the region.

Mortgage interest rates continue to challenge first time buyers; however, market participants appear to be acclimating to rates that look more like long run averages than the once-in-a-generation bargains seen during the COVID years. Market forecasters expect the Federal Reserve to lower benchmark rates by 50 basis points by year end. This means that mortgage rates may ease somewhat, but the forecast team expects 30-year fixed mortgage rates to remain in the mid-6% range.

While uncertainty is the overarching theme of the region’s economy, the housing market looks set to become more balanced in supply and demand metrics, which is healthy compared to the past few years. Overall, the forecast for the Greater NVAR region calls for:

• Modest sales price increases, generally between 2% to 2.5% month-over-year through the end of the year — more in line with overall inflation; and,
• Stable or modestly increasing unit sales, particularly for detached single family properties in desirable neighborhoods; while,
• Inventories will continue to rise through the end of the year for most regional markets and home types.

While some inventory increases are forecast to be more than 70% month-over-year through the end of the year, the percent change represents relatively few homes and often reflect a return to market-normal conditions for Northern Virginia after periods of historically tight inventory. Given that Northern Virginia continues to be a desirable place to live, and there remains a lot of pent-up demand for for-sale housing, prices will continue to rise even as inventories increase. For some households not directly impacted by federal government uncertainties, this may be the best opportunity to purchase a home since before the pandemic. There is likely to be plenty of market activity for Northern Virginia Realtors® members.

Forecast by Jurisdiction

Fairfax County (view charts)

The Fairfax County housing market is forecast to hold up throughout the second half of 2025. Median prices are forecast to increase more slowly than in the recent past, rising roughly 2.2% to 2.5% month-over-year on average between 2024 and 2025, with little variation among home types. Similarly, sales volumes are forecast to increase 0.0% to 1.6% month-over-year on average between 2024 and 2025, with sales of condos and townhomes slowing to be marginally positive. The most notable change is in inventory, which is forecast to increase between 52.0% and 79.5% month-over-year between 2024 and 2024, with more inventory building in townhomes (79.5%) and condos (73.9%) than single-family detached (52.0%). Overall, sales will remain steady as home prices trend back toward pre-pandemic growth rates and inventory levels normalize.

Arlington County (view charts)

In Arlington County, the housing market is forecast to be relatively solid for single-family detached and townhomes, with some weakness in the condo market. While median sales price is forecast to increase month-over-year from 2024 to 2025 by an average of 2.2% for Arlington single-family detached and 1.5% for townhomes, the median price of condos sold is forecast to decline by 4.9%. Sales of single-family detached homes are forecast to increase by a month-over-year average of 16.3% from 2024 to 2025, with townhome sales increasing an average of 2.2% month-over-year. In contrast, sales of condos are forecast to decrease a month-over-year average of 2.1% from 2024 to 2025. While the inventory of single-family homes is forecast to increase month-over-year 69.5% on average from 2024 to 2025, the total number of homes available remains a modest 167 in December. Townhomes inventory is forecast only to increase modestly, while condo inventory is forecast to increase to 236 in December.

Alexandria City (view charts)

The Alexandria City housing market is forecast to be characterized by slow sales price increases and markedly higher inventory, particularly for townhomes and condos. The average month-over-year sales price is forecast to increase an average of 2.0% to 2.9% on a month-over-year basis from 2024 to 2025. Sales for single-family detached homes and townhomes are forecast to increase 3.1% and 5.6% on average from 2024 to 2025, while condo sales are forecast to decline on average 9.6% month-over-year over the entire year. While inventory for single-family detached is forecast to grow an average of 38.4% month-over-year, townhome inventory is forecast to increase by 81.8%, while condo is forecast to increase an average of 73.5%. Overall, while sales and prices are forecast to have modest increases, inventory is forecast to build to pre-pandemic levels, putting downward pressure on price increases.

Prince William County (view charts)

In contrast to the rest of the region, the Prince William County housing market is forecast to have modest sales price growth paired with a slight decrease in sales and a rise in inventory to pre-pandemic levels. Sales prices are forecast to increase between 0.1% (townhomes) and 3.6% (single-family detached). Sales in Prince William are forecast to decline for all home types, ranging from an average month-over-year decline of -1.8% for townhomes, -4.9% for single-family detached, and -6.8% for condos. Inventory in Prince William is forecast to increase for all home types, ranging from an average month-over-year increase of 46.3% for townhomes to 78.3% for condos. Overall, while sales prices in Prince William’s housing market are forecast to be very modestly positive, sales are forecast to decline while inventory builds.

Loudoun County (view charts)

The Loudoun County housing market is forecast to follow much of the region, with more modest price increases alongside building inventory. Average month-over-year prices are forecast to increase month-over-year an average of 2.5% to 2.7% from 2024 to 2025. While sales of single-family detached homes in Loudoun are forecast to increase 13.5%, sales of townhomes are forecast to be a more modest 3.9%, while condo sales are forecast to decline just slightly (-0.4%). Inventory is forecast to build to pre-pandemic levels in Loudoun County, with the average month-over-year increase in Loudon County ranging from 26.5% (Condos) to 77.6% (single-family detached). In general, Loudoun County is forecast to record modest price increases while inventory rises to pre-pandemic levels.

Stafford County (view charts)

The Stafford County housing market is forecast to have modest weakness through the end of the year. Note that due to the small number of condo units in Stafford, they are not forecast. Median price increases for single-family detached and townhomes are forecast to average 2.8% and 1.6% month-over-year, respectively. Meanwhile, sales volume for single-family detached and townhomes are forecast to decline modestly, an average of 3.0% and 7.9% through the end of the year. There are few attached units in Stafford and the number ranges from 20 to 30 through the end of the year. Inventory for both detached and townhomes is forecast to increase an average of 37.5% and 50.5% month-over the year through the end of the year.

Learn more at cra.gmu.edu and NVAR.com/stats.

Note – forecasts were produced prior to the release of May data.