April 2025 Housing Market Update | Virginia Beach & Norfolk Insights

April 2025 Housing Market Update | Virginia Beach & Norfolk Insights

As a reminder, an index level of 50 represents the breakeven point between contraction (<50) and expansion (>50).

The MBS Highway National Housing Index rose 3 points in April 2025, reaching a level of 48. While marking the fifth consecutive month of growth, overall buyer activity and home price direction remain cooler compared to this time last year.

National Overview

• Buyer Activity Index: Increased 4 points to 49 (compared to 53 in April 2024). This suggests a more moderate seasonal improvement than last year.

• Price Direction Index: Rose by 2 points to 46, notably lower than April 2024’s 66, indicating a continued slowdown in home price growth nationwide.

Why the Market is Cooling

Experts cite several reasons behind the current market cooling trend:

• Elevated Mortgage Rates: A U.S. News survey found that 76% of potential buyers delayed their home purchases in 2024, waiting for interest rates to drop. High borrowing costs continue to be a significant barrier.

• Economic and Political Uncertainty: Broader uncertainty due to fluctuating economic conditions and political developments, such as tariffs and policy changes, has made buyers cautious.

• Affordability Concerns: With high home prices and increased monthly payments, many first-time buyers are priced out, contributing to a slowdown in demand.

Understanding these headwinds is key to interpreting national housing trends and how they may impact local markets.

Regional Market Highlights

• Mid-Atlantic Region: Strong performance, with Buyer Activity rising 10 points to 59, and Price Direction at 63, signaling solid market conditions.

• Northeast Region: The most active nationally, with Buyer Activity reaching 69 and Price Direction soaring to 76.

• Southeast and Southwest Regions: These regions showed lower activity, with Buyer Activity indices of 35 and 44, respectively.

Local Housing Market Insights: Virginia Beach & Norfolk

Virginia Beach and Norfolk continue to show steady growth and resilience despite national cooling trends.

• Virginia Beach: Projected home values to increase by approximately 3% throughout 2025. The market remains attractive due to its desirable coastal location, community amenities, and lifestyle appeal.

• Norfolk: Median home prices increased 3.8% year-over-year to $335,000, with homes spending an average of only 37 days on market, reflecting robust demand.

Important Insurance Trends

Rising home insurance premiums, driven by increasing natural disasters and higher replacement costs, are becoming an important consideration:

• Virginia Beach: Annual home insurance premiums average around $2,448.

• Norfolk: Average annual premiums are approximately $2,916.

Strategic Recommendations for Buyers and Homeowners

• Stay updated on local market conditions.

• Regularly assess your home insurance coverage and costs.

• Consult our expert team, Team L'Hoste, for personalized guidance tailored to your real estate needs in Virginia Beach and Norfolk.

Understanding these market dynamics can greatly enhance your decision-making and help secure your real estate investments.

For personalized advice or to explore opportunities in the Virginia Beach and Norfolk real estate markets, connect with Team L'Hoste today!