Mortgage rates continue to shape housing market activity by affecting affordability, purchasing power, and buyers’ decisions about when to enter the market. As elevated borrowing costs have challenged prospective home buyers, how has Virginia’s housing market responded? 

Comparing the third quarters of 2025 and 2026 shows that mortgage rates were higher as closed sales and pending sales declined statewide. A closer look at Virginia’s metro areas reveals the differing extents to which this trend played out over the three-month period.  

Mortgage Rates Crossed the 7% Mark 

Elevated mortgage rates have dominated headlines across the housing industry. Towards the end of Q3 2026, the average weekly 30-year mortgage rate stood at 7.03% (week 39). In comparison, the average 30-year rate was 6.3% (week 39) at the end of Q3 2025. When the average 30-year rate crossed 7% in September, NAR Chief Economist Lawrence Yun said the industry should “expect 7% as the new normal.” These rates can discourage many buyers from entering the market. 

According to the Freddie Mac Primary Mortgage Market Survey, the average 30-year fixed mortgage rate was 6.57% in the third quarter of 2025, compared with 6.68% in the third quarter of 2026, an increase of 11 basis points. Although the difference was relatively small, borrowing costs remained a significant consideration for prospective buyers. In Q3 2026, mortgage rates rose each week from the beginning of the quarter, while in Q3 2025, they trended down each week towards the end.  

Additionally, it’s important to note that mortgage rates are only one factor influencing housing demand. Household income, home prices, available inventory, and broader economic conditions can also influence buyers’ decisions.  

Closed Sales and Pending Sales Declined Across Virginia in Q3 

Activity was slower in Q3 2026 compared to Q3 2025 in Virginia’s housing market. During Q3 2026, there were 27,757 closed sales statewide, a 2.2% decline from 28,388 sales recorded in Q3 2025. This represents 631 fewer home sales.  

Pending sales fell even more sharply. Virginia recorded 24,521 pending sales in Q3 2026, down 7.3% from 26,461 during Q3 2025, which is 1,940 fewer homes going under contract.  

The larger decline in pending sales is more noteworthy. While closed sales reflect completed transactions, pending sales indicate how buyer activity will trend in the upcoming months. A decline in pending sales can signal softer demand and potentially slower closed sales activity in subsequent months. Although statewide sales activity slowed, the decline varied across Virginia’s metropolitan areas. 

What Do These Trends Mean for Virginia’s Housing Market?

The Q3 comparisons highlight the challenges facing Virginia’s housing market as borrowing costs increase. As mortgage rates are trending upwards, potential buyers are choosing to delay their home buying plans. The impact of higher mortgage rates is further worsened by general economic uncertainty and lingering weaknesses in the labor market. Although the average mortgage rate was only slightly higher, both closed and pending sales declined during these three months. 

For REALTORS^®, understanding these regional differences matters. As Virginia moves into the final quarter of 2026, pending sales will be an important indicator to monitor whether buyer activity strengthens or continues to soften, helping determine the housing market’s direction heading into 2027.