Mortgage Rates vs. Home Prices (2015–2029)

A Decade of Divergence

Over the past ten years, the U.S. housing market has defied expectations. From 2015 to 2021, mortgage rates hovered at historic lows, briefly dropping below 3% during the pandemic. At the same time, home prices surged as buyers flooded the market. However, when interest rates began climbing rapidly in 2022—eventually surpassing 6.5%—home prices didn’t drop. In fact, they kept rising. National averages show that home values increased from approximately $294,000 in 2015 to over $490,000 by 2024. The takeaway? Despite affordability pressures, demand and limited supply have kept upward pressure on home values.

What Drove Home Prices Higher?

Several factors contributed to the sustained growth in home prices. Low housing inventory remains a nationwide issue. Even as borrowing costs rose, the lack of homes on the market created competition. Additionally, lifestyle migration, remote work flexibility, and demographic shifts—particularly millennials entering their peak buying years—added fuel to the fire. In markets like Roanoke and Smith Mountain Lake, we’ve seen this play out through multiple-offer situations, rising appraisals, and continued appreciation.

Where Are We Headed?

Looking ahead to 2025 through 2029, most projections show a gradual decline in interest rates, possibly reaching the low-to-mid 5% range by the end of the decade. While rates are unlikely to return to pandemic-era lows, they may normalize enough to improve affordability. Home prices, meanwhile, are expected to continue appreciating—though more slowly. Current forecasts suggest moderate but steady price increases, supported by demand outpacing new construction. Barring a major economic disruption, there’s no sign of a housing crash—only a rebalancing.

What This Means for Buyers and Sellers

For buyers, waiting for lower rates could be costly if home prices continue to rise. In many cases, it makes more financial sense to purchase now and refinance later. For sellers, equity positions remain strong—especially for those who purchased before 2020. Investors should continue to focus on long-term strategy, as the fundamentals of the market remain solid, especially in regions with job growth, quality of life, and in-migration—like ours.

A Local Perspective

In Roanoke, Smith Mountain Lake, and the surrounding counties, the same trends are unfolding—just with our own regional nuance. Whether you're looking to move closer to the lake, downsize in the city, or purchase investment property, now is a good time to review your options. I'm here to help with market insight, local expertise, and smart strategy.