H
omeownership has long been a cornerstone of financial stability and wealth-building in America, but rising interest rates and skyrocketing listing prices have made it increasingly elusive for many. In Falls Church, housing costs have risen dramatically over the past two decades, with the median sale price for a single-family home now exceeding $900,000. The affordability gap has widened further with higher interest rates, which have hovered around 7.25 percent in 2024 compared to less than three percent just a few years ago.

    This has a significant impact on what prospective buyers can afford, with the commonly recommended maximum housing cost being 30 percent of gross monthly income. For example, a household earning $164,536 annually could afford a home priced up to $1.2 million under a three percent interest rate, but that budget drops to roughly $710,000 with a seven percent rate.

    Renters are also struggling, with the average monthly rent for a one-bedroom apartment in Falls Church reaching around $2,200 in 2024, up from $1,500 a decade ago. To afford this without exceeding 30 percent of gross income, an annual income of at least $100,000 is required.

    The median value of all owner-occupied housing in Falls Church was $938,500 between 2018 and 2022, requiring an annual income of at least $220,000 to afford a home at this price. This far exceeds the average household income in the region, making homeownership unattainable for many without significant financial resources.

    Realtors across the area agree that waiting for interest rate changes comes with risks, as housing prices continue to rise. Tori McKinney, CEO of RockStar Realty Group, noted that "there is a cost for waiting," and that buyers who wait may face even higher prices down the road.

    For first-time buyers, Alison Miller advises considering smaller properties as a stepping stone to homeownership. Realtors are optimistic that homeownership is still within reach for many if approached strategically, but emphasize the importance of working with the right professionals and developing a clear plan.

    Ultimately, the decision to rent or buy hinges on individual financial situations and long-term goals. With prices rising and interest rates fluctuating, both renters and buyers face significant challenges in today's market. However, having a plan is critical for those interested in pursuing homeownership in an increasingly competitive market.