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RICHMOND, VA — The Home Builders Association of Virginia (HBAV) has released its inaugural Virginia Housing Trends Brief offering a look at home building activity, pricing, and builder sentiment across the Commonwealth.
With builder confidence declining, mortgage rates remaining elevated, and consumer sentiment retreating in June, the report draws from national, regional, and state-level data to help Virginians better understand the forces shaping housing.
“We’re releasing this new resource to offer a clear, consistent picture of where the Virginia new home market stands and where it may be headed,” said Craig Toalson, CEO of HBAV. “Whether you’re a builder, homebuyer, or policymaker, our goal is to ground conversations in factual, data-driven information available to help Virginians make smart, forward-looking decisions.”
While housing starts across the U.S. are projected to rise modestly in 2025 thanks to a strong multifamily sector, the South — including Virginia — is seeing slower momentum overall.
In the second quarter of 2025, Virginia issued 5,254 single-family and 2,803 multi-family permits to build new homes (housing permits are an authorization from a local government to allow for construction or renovation). Single-family permits declined 14.8% over the same period in 2024, while multifamily permits increased 24%. Nationally, single-family permits were down 7% year over year, with multi-family permits up 10.3%. Data is supplied by the U.S. Census Bureau and is compiled and analyzed by NAHB.
Builder confidence dropped again in July, falling to a score of 33 on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index, marking the 15th straight report in negative territory. The index reflects builder sentiment about current and future market conditions; a score below 50 (on a scale of 100) indicates more builders view conditions as poor than good, while scores above 50 indicate more positive sentiment. July data reflects concerns over interest rates, material costs, and policy uncertainty.
At the same time, national consumer confidence fell sharply in June, adding to signs of broader economic caution. The Conference Board’s Consumer Confidence Index dropped from 98.4 to 93 — its second-lowest level since February 2021 — while the Expectations Index remained below the recession-warning threshold of 80 for a fifth consecutive month. The index measures how consumers feel about the economy in the months ahead. When it stays low, it’s often a sign that consumers are bracing for a slowdown.
Additional Takeaways for Virginia:
- Housing starts (when ground is actually broken for new home construction) in Virginia are forecasted to remain relatively flat in 2025, with 23,400 projected single-family starts — up slightly from 22,700 in 2024 but still well below the 30,000+ seen in 2021, according to NAHB. Nationally, single-family housing starts declined 4.6% in June. Weakness was seen in most regions, especially in the South where single-family construction is down 12% on a year-to-date basis.
- The median sales price for all homes (new and existing) in Virginia was $446,144 in June 2025, up by almost $15,000 since last year, increasing by 3.4%, according to Virginia REALTORS. While Virginia data for new home sales is unavailable from NAHB, the median new home sale price in the U.S. edged down 2.9% year-over-year in June to $401,800, based on National Association of Home Builders data.
- Mortgage rates edged down slightly in June, with the average 30-year fixed rate falling to 6.86%, according to the Mortgage Bankers Association. Purchase applications rose 3.7% and refinance activity increased 6.5% month-over-month.
“For policymakers and local leaders, the latest new home construction data show that while Virginia’s long-term housing needs remain high, short-term caution still defines the landscape,” Toalson said. “Even with strong long-term demand, it’s a complex time for builders. Interest rates are slowing buyer traffic, and cost pressures are making it harder to plan ahead. But Virginia builders are adapting. They are offering additional floorplans and products such as townhomes, using home buyer incentives on upgraded features and offering mortgage rate buy-downs to reduce interest rates.”
The new home housing market continues to face headwinds in 2025. Builders are navigating slower permitting activity and a flat forecast for new starts, signaling a market still in reset mode from rising home prices and the interest rate “lock-in effect,” which refers to homeowners being reluctant to sell their homes due to having a low interest rate on their current mortgage. While demand remains, many would-be buyers are staying on the sidelines due to higher mortgage rates.
At the same time, the narrowing gap between new and existing home prices suggests Virginia builders are making strategic shifts — new home product offerings, including upgrades on finishes and smart home technology, and focusing on growing population segments that desire smaller and more affordable homes. These moves may help stabilize activity in the months ahead, even as economic uncertainty lingers, according to Toalson.
Virginia’s trajectory mirrors the Southern U.S. regional trends: cooling starts, affordability challenges, permitting delays, labor challenges, and maintaining supply chains.
To see how these trends are playing out in specific metro areas, readers can explore the NAHB Metro Area Economic Dashboard.
About the Virginia Housing Trends Brief
Produced by the Home Builders Association of Virginia in partnership with the National Association of Home Builders (NAHB), the Virginia Housing Trends Brief offers a snapshot of the state’s housing market. The update draws on trusted NAHB data — including builder sentiment, housing starts, permits, pricing, and mortgage activity — to highlight trends shaping single-family, multifamily, and remodeling activity across the Commonwealth.
About the Home Builders Association of Virginia
The Home Builders Association of Virginia (HBAV) was founded in 1956 to promote and protect the Virginia housing industry. HBAV is a member of the 3-in-1 Home Builders Association Federation that includes the National Association of Home Builders (NAHB) and 13 local Home Builders Associations in Virginia. Members join to support HBAV’s mission and their livelihood. To join, companies apply for membership at the local association level and in doing so, become members of HBAV and NAHB.
HBAV serves the entire home building, development, and remodeling industry. One-third of HBAV’s three members are home builders, multifamily builders, land developers, and/or remodelers, while the remaining two-thirds are professional businesses and trade partners that work closely in related fields such as financing and building products.
HBAV works to accomplish its mission through advocacy, industry news and education, and membership events such as the Virginia Builders Summit & Expo and the Virginia Housing Excellence Awards.
MEDIA CONTACT
Daniel Carrigan, HBAV
[email protected]
(717) 201-6911