Hampton Roads home sales drop, rents continue to climb

Hampton Roads home sales dropped last year as buyers faced higher prices because of higher mortgage rates and a low number of homes on the market.

Renters also found little relief in 2023 as rents continued to climb.

“This year was challenging. No doubt about it,” J. Van Rose Jr., executive chairman of Berkshire Hathaway HomeServices RW Towne Realty, told attendees of the Hampton Roads Real Estate Market Review and Forecast on Wednesday.

After two years of explosive growth and one of decline, home resales in Hampton Roads fell 22.7% from 28,481 in 2022 to 22,021 last year, according to the ODU report. The median sales price also shot up 5.9% from $300,000 in 2022 to $317,777.

Interest rates hovered around 7%, hurting first-time homebuyers and deterring those thinking about selling, Rose said during his presentation at Old Dominion University, noting the latter would have to give up their 2-3% interest rate on a 30-year loan for a new mortgage at 7%.

“It froze those that have houses in the market,” Rose said. “They’re not putting their houses on the market.”

A good year for apartment rental companies continued to mean bad news for tenant pocketbooks. Average monthly rent in Hampton Roads increased nearly 27%, to $1,474, in 2023 from $1,162 five years ago, according to the ODU report. The vacancy rate of 6.65% was also much lower than the national average of 8.39%.

“Astonishingly, Hampton Roads has not recorded a single year of rent decline in this century,” said Victoria Pickett, executive managing director for Newmark’s multifamily capital markets in the region.

In the future, Pickett noted during her presentation that more residents will be forced to rent rather than buy homes due to rising credit card debt and falling monthly saving amounts.

The average household had more than $20,000 in credit card debt as of September 2023, according to a Nerdwallet analysis . The personal saving rate, or the percentage of after-tax income saved each month, fell from a high of 32% in April 2020 to just 3.8% in January, according to federal data.

Trevor Metcalfe, 757-222-5345, trevor.metcalfe@pilotonline.com

Read coverage of last year’s ODU Real Estate Market Review and Forecast here .