Analysis: "Stabilization," Yes; "Healthy"? Depends on Your Perspective
Diving into the monthly real estate report from the Fredericksburg Area Association of Realtors.
By Martin Davis
EDITOR-IN-CHIEF
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In its press release announcing the August home sales report, the incoming president of the Fredericksburg Area Association of Realtors, Matthew Rathbun, described the housing market this way: “Sellers aren’t seeing the rapid pace of sales we’ve had in recent years, but the market remains balanced and healthy.”
Bottom line, Rathbun continued, “Overall, we’re in a period of stabilization rather than sharp swings, which is good news for long-term market confidence.”
There is certainly a case to be made for stabilization and health, but as has been the case for several months now, this remains a challenging market for those looking to move into a new home.
Stabilization, Health
Across the region that the FAAR report covers (Caroline, Colonial Beach, Fredericksburg, King George, Orange, Spotsylvania, and Stafford) prices for homes are up a modest 5% when comparing August 2024 to August 2025. Helping this relatively modest jump is a gradual decline in mortgage interest rates.
At the end of May, the average mortgage rate for a 30-year fixed-interest mortgage was 6.97%, according to bankrate.com, and that number has been on a slow, steady decline ever since. As of September 16, that number is down to 6.37%.
Another indicator that the real estate industry looks to, months of inventory, is up 38% over August 2024 to 2.83 months. Months of inventory reflects that amount of time it would take to sell all homes on the market assuming that no new homes are added. Historically, four to five months of inventory is deemed healthy—anything above that indicates a buyers’ market and anything below indicates a sellers’ market.
While our market still favors sellers, the jump in inventory suggests that things are slowly getting better for buyers. (As is the case with most data points, however, “months of inventory” comes with important qualifications—see “Is Five Months of Supply Really the Sign of a Healthy Housing Market?” by Dr. Lisa Sturtevant on Virginiarealtors.org.)
Underlying Worries
While the market as a whole is steadying itself and flashing indicators that in normal times would suggest a level of health, there are some worrying signs.
With the exception of Orange County, for example, every locality covered by FAAR saw home sales in August 2025 compared with home sales in August 2024 stay flat (Spotsylvania) or decline—in some cases, sharply.
Meanwhile, housing prices in each of these areas, with the exception of Caroline and Orange, continue to climb.
Home prices are not just high, they have been stubbornly high—indeed, climbing—for the past four years. That’s great news for those who own a home.
However, for those looking to enter the market, this means only those with substantial access to capital or high salaries are likely to be able to buy in.
Let’s consider, for example, the two most dynamic markets in our region—Spotsylvania and Stafford. Of the area FAAR serves, 67% of homes sold are in these two counties. So what does it cost to actually purchase a home in Spotsy or Stafford?
Dollartimes.com provides a useful calculator for getting a high-level look at the costs involved.
In Spotsylvania, for example, to buy a home at the median price of $460,000 with a traditional 30-year fixed-rate mortgage, a buyer with excellent credit getting a 6.32% loan and keeping their mortgage payment at 30% of total income would need:
20% down payment — $92,000
Annual household income — $91,305
The average household income in Spotsylvania County in 2023 according to Data USA? $109,576.
Compare that with Stafford, where the median price is $550,000:
20% down payment — $110,000
Annual household income — $109,169
The average household income in Stafford County in 2023 according to Data USA? $133,792.
There are, of course, multiple programs available for people who qualify that require far less money down. However, these numbers provide some guide to the costs of purchasing one’s way into home ownership.
That the average household income required to purchase a home, using Dollartime’s formulae, remains below the average household income in each county means that the market is still accessible to middle-income families.
However, federal job cuts and a lagging economy will be factors to watch in the months ahead.
So yes, the real estate market is relatively stable at the time. But uncertain waters are ahead — how our market navigates those waters remains to be seen.
And for those looking to buy their way into the market? While a stable market helps, high prices and relatively high interest rates continue to be a challenge.
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