I hope you had an excellent start to the new year!
As we move forward into February, let’s take a look at the latest real estate trends in Harrisonburg and Rockingham County. Whether you’re considering buying, selling, or just keeping an eye on the market, staying informed is key.
On to Some Local Market Trends…
Monthly Home Sales
In January 2025, there were 82 home sales in the area, which is slightly lower than the 96 sales recorded in January 2024 but an improvement over the 2023 figures. January is traditionally a slower month for real estate, so while the decrease compared to last year is notable, it’s not entirely unexpected. It’s likely that January 2025 will represent the lowest point for home sales throughout the year.
Median Sales Price
The median sales price has been on the rise, reaching $341,100 in January 2025. This is higher than both 2023 and 2024 figures, which aligns with expectations given the current market conditions. Notably, while home sales have increased by 10% over the past year, the median sales price has only risen by 5%. This suggests that while more homes are selling, price growth has been relatively moderate, indicating potential stabilization in home prices despite increased demand.
Median Sales Price vs. Median Days on Market
Taking a look at median sales price and how it compares to median days on market helps us to visualize the relationship between home prices and the speed of the market. It helps us to see whether the market favors buyers or sellers, which helps us understand demand, pricing strategy, and seasonal shifts.
It is worth noting that our local metrics can fluctuate significantly from month to month due to the smaller sample size of data in our local market.
From the comparison of median sales price to median days on market, there are a few key insights to consider:
We are still in a seller’s market. Notice how lower days on market correlate with higher prices. This occurs because, in a seller’s market, low inventory creates more competition among buyers. With fewer homes available, buyers must act quickly, leading to shorter days on market. To secure a home, buyers also submit stronger, higher-priced offers, which explains the higher price points despite lower days on market.
The data reflects seasonal trends. Market activity tends to increase in the spring and summer, with lower days on market and higher prices, while fall and winter bring slower sales and price adjustments.
There is an inverse relationship between price and days on market. When homes sell faster, prices are higher due to increased buyer competition. When sales slow, prices tend to stabilize or decline slightly due to reduced urgency and lower demand.
Days on Market Trends
Taking a look at the monthly median days on market (DOM) trends helps us understand seasonal patterns and how quickly homes are selling in different months. The chart highlights clear seasonal shifts, with higher DOM in the winter months (January and February) and lower DOM in the spring and summer when market activity typically picks up. This seasonality is consistent across 2023 and 2024, and early data for 2025 suggests a similar trend.
This year’s January DOM being slightly lower than last year’s but higher than 2023’s suggests that while the market is still strong, it isn’t quite as aggressive as it was two years ago. The key will be to see how DOM trends in the coming months. If DOM continues to drop in the spring and summer, the market will likely remain strongly in favor of sellers. However, if it remains elevated compared to previous years, it could indicate a gradual shift toward a more balanced market.
What Does All This Data Mean for Buyers and Sellers as We Move Into the New Year?
Sellers: The market remains in your favor, with low inventory keeping competition strong among buyers. If you’re considering selling, pricing your home correctly and preparing it well for market conditions can help you attract strong offers quickly. With seasonal trends in mind, listing sooner rather than later could position you to take advantage of increasing spring demand.
Buyers: Buyers: While competition is still high, in accordance with seasonal shifts, we will likely see more homes for sale in the spring—so be ready! With mortgage rates stabilizing in the 6-7% range, waiting for a major drop may not be the best strategy. Instead, focus on securing a home that meets your needs. Keep an eye out for homes that interest you, and when the time is right, you can make a smart move in today’s market.
BONUS: What Causes the 30-Year Adjustable Rate Mortgage to Shift?
Many factors contribute to shifts in mortgage rates. Below, I will outline a chronological list of major events from 2023 to 2025. While it is never certain what causes rates to change, these are some factors I personally believe influenced mortgage rate trends.
2023
[1] March: Banking Crises
The collapse of Silicon Valley Bank and Signature Bank raised concerns about financial stability. The uncertainty led investors to seek safer assets, causing temporary rate dips, as seen in #1 on the 30-YR Adjustable Rate Mortgage chart.
[2] May/June: Federal Reserve Rate Hike & Debt Ceiling Crises
The Fed raised interest rates by 0.25 percentage points, pushing borrowing costs to their highest level since 2007. This contributed to the steady increase in mortgage rates, as seen in #2 on the chart.
Political deadlock over the U.S. debt ceiling created market volatility. Concerns about a potential government default added upward pressure on mortgage rates, also contributing to the rise in mortgage rates seen in #2 on the chart.
[3] September – December
- September – The Fed Paused Rate Hikes
- October – 10-Year Treasury Bond Yields Dropped
- December – Fed Kept Rates Unchanged Again
From September to December 2023, mortgage rates declined due to a series of events. In September, the Fed paused rate hikes, signaling that borrowing costs might not rise further, which began to shift market expectations. In October, 10-year Treasury bond yields dropped, making mortgage-backed securities more attractive and helping push mortgage rates down. Finally, in December, the Fed kept rates unchanged, reinforcing confidence that rate hikes were over, which continued to support lower mortgage rates.
2024
[4] January: Inflation Rose to 3%
Inflation rose to 3%, leading to concerns that the Fed would keep interest rates high. This contributed to a steady rise in mortgage rates between January and May, as illustrated in #4 on the chart.
[5] May: More Stable Rate Environment
From May to July 2024, mortgage rates slowly started to decline as inflation showed signs of easing and investors expected a more stable rate environment. This is illustrated by #5 on the chart.
[6] July: Expectation of Rate Cut
From July to September, we saw the slow decline start to accelerate, largely due to expectations of an upcoming rate cut from the Fed. As expected, on September 18, 2024, the Fed did indeed reduce the federal funds rate, aligning with the expectations that drove down mortgage rates. This is illustrated by #6 on the chart.
[7] September: Rate Cut and Increase in Bond Yields
From September to November, mortgage rates rose. After the Fed’s September rate cut, bond yields increased because investors expected a stronger economy. They sold bonds, causing bond prices to fall and yields to rise, which pushed mortgage rates up. When bond yields rise, mortgage rates usually follow. Additionally, inflation concerns led to expectations that the Fed might slow its rate cuts, further driving rates higher. This is illustrated by #7 on the chart.
[8] November: Fed Cuts Rate Again
Mortgage rates decreased slightly as the Fed cut rates again in November. This helped lower borrowing costs, but the decrease was small as investors were still concerned about inflation. This can be seen in #8 on the chart.
[9] December: Higher Inflation
Mortgage rates increased due to higher inflation in early 2025, leading to concerns that the Fed might keep rates higher for longer. This raised expectations that it would likely be some time before any further rate cuts, causing mortgage rates to rise again. This is illustrated by #9 on the chart.
Why Look at Mortgage Rates?
Understanding mortgage rates is crucial for both buyers and sellers. Mortgage rates directly impact affordability, which influences the decision to buy or sell. Over the past few years, we’ve seen mortgage rates fluctuate due to a variety of economic factors, but the 6-7% range seems to be the new normal—at least for now. It’s important to acknowledge this reality and adjust expectations accordingly. However, to offer a word of hope: for buyers and sellers, accepting the current rate environment will allow you to make informed decisions, which is key to navigating today’s market conditions with confidence!
Let’s Connect!
If you’re considering buying or selling, let’s set up a time to chat. We can grab coffee and discuss your goals or dive deeper into real estate market trends. I’d love to help!