Virginia REALTORS chief economist Ryan Price outlined a rosier outlook hampered by job losses, high mortgage rates, and persistent housing shortage
Virginia’s housing market is likely to see modest sales growth in 2027, but high mortgage rates, job losses and a persistent housing shortage will continue to challenge buyers and builders, according to Virginia Realtors Chief Economist Ryan Price.
Speaking September 29 during the Home Builders Association of Virginia’s 2027 Builders Summit, Price offered a measured outlook for the coming year. “It’s not fantastic, but it’s also not a cliff.”
Economic pressures and population growth
The national economy remains in growth mode, supported by consumer spending and investment in artificial intelligence. But higher-income households are driving much of that spending, while many consumers remain concerned about inflation, energy costs and job security.
Virginia faces additional pressure from federal employment and contracting cuts, he said. The state has lost about 7,700 jobs since the beginning of 2026. Gains in leisure and hospitality have not fully offset losses elsewhere, including professional and technical services.
Population trends offer a brighter spot. Virginia added about 60,000 residents in 2025, bringing its population to 8.8 million. International migration accounted for most of the growth, while migration from other states turned positive after years of net losses.
“We are a slow growth state, not a shrinking state,” Price said.
Central Virginia is attracting newcomers, including Northern Virginia residents seeking lower housing costs. Remote work and affordability have also helped smaller communities attract residents.
Housing supply remains tight
Statewide home sales rose 3.6% through August compared with the same period in 2025. More listings and lower mortgage rates earlier in the year supported a stronger spring market. Rates approaching 7%, however, could slow fall sales and reduce the year’s overall gain.
Despite rising listings, Virginia had just 3.2 months of housing supply, with tighter inventories in Northern Virginia and Richmond. Homes continued to sell quickly, and prices rose as demand exceeded supply.
“Sellers still have the upper hand in most negotiations,” Price said.
Years of insufficient construction and homeowners’ reluctance to surrender low mortgage rates have contributed to the shortage.
A measured outlook for 2027
For 2027, Price projects a 4.1% increase in home sales, driven partly by higher-priced properties. He expects prices to flatten, with possible declines in larger, more expensive markets.
Housing starts are expected to decline as builder confidence weakens.
“We’re not seeing evidence that it’s going to be picking up in 2027,” he said.
Mortgage rates could remain in the upper 6% range by the end of next year, limiting affordability and leaving little prospect of a significant rebound in new construction.
