Virginia homebuyers get relief as interest rates drop

ROANOKE, Va. (WDBJ) – Recent changes to interest rates are offering relief to homebuyers, especially first-time buyers who have struggled to break into the market.

Experts say lower rates are helping, but the real advantage for buyers comes from combining today’s rates with programs designed to reduce upfront costs.

Mortgage rates have fallen after the Federal Reserve implemented recent rate cuts aimed at supporting the economy and consumer spending.

As of mid-December, the average 30-year fixed mortgage rate is around 6.2 percent, down from more than seven percent earlier this year. While these rates are still higher than pre-pandemic levels, they have made monthly payments more manageable for many homebuyers.

Realtors say the market itself is giving buyers added leverage. Homes are sitting longer, allowing buyers to negotiate for concessions that were rarely available in recent years.

“On the listing side, a lot more listings are sitting. But for my buyers, we have a lot more leverage,” said Alyshia Merchant, a local realtor.

That leverage allows buyers to request help covering closing costs, repairs, and sometimes even reduce their mortgage interest rate. Realtors call this practice “stacking,” which combines seller concessions with state and local programs to make homes more affordable.

“So what we’re doing is stacking. So I’m asking for six percent in closing costs, which in a seller’s market would never happen. But in this buyer’s market, sellers are saying yes,” Merchant said.

Programs through Virginia Housing and SERCAP can further reduce mortgage rates for eligible first-time buyers, giving them significant financial support.

For new homeowner Danitra Stockton, that combination made buying her first home a reality.

“This is my first home and I’m so excited, so blessed. It was an amazing experience, one that I did not think was obtainable for me as a single mom,” Stockton said.

She added that participating in a program to lower her interest rate helped ease the process.

“The interest rates were scary and I was blessed enough to be a part of a program that I was able to get a better interest rate by taking a class,” Stockton said.

Experts warn that waiting could cost buyers because competition may increase and seller concessions may become less generous.

“My biggest fear is that if you wait and rates drop tremendously, then we’re going to be back into that competitive season,” Merchant said.

For first-time buyers, today’s combination of lower mortgage rates, market leverage, and assistance programs may make this one of the most favorable windows to buy in years.

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