Mortgage Rates, Rent, and Reality: A Practical Look at Buying a Home Today in Richmond

Lately I’ve been hearing from a lot of people here in Richmond who’ve decided to keep renting because they believe buying a home simply isn’t attainable right now.

Many prospective buyers are understandably nervous after seeing headlines about interest rates, and some are waiting for dramatically lower rates before making a move. The reality, though, is that today’s mortgage rates—around 6%—aren’t unusually high when you compare them to historical averages over the past several decades.

And for those who are hoping for rates to drop back down into the 2%-4% range, it’s worth asking an important question: what kind of economic conditions would cause rates to fall that low again? The last time we saw rates that low was during the economic disruption caused by the COVID-19 pandemic. Historically, rates tend to fall to those levels when the economy is under significant stress. That’s not necessarily the type of environment most people would want to see return.

Sometimes I hear similar comments from clients and friends who are thinking about selling. They’ll often say, “Why would I move when I have a 2.5% or 3% interest rate on my current house?” I completely understand that mindset. But at the same time, why let that interest rate get in the way of your long-term goals?

If you have a very low rate, there’s a good chance your home’s value has increased significantly over the last three to five years. That appreciation often means you now have substantially more equity in your home — equity that could become a larger down payment on your next property.

Let’s look at the numbers.

The average rent for a three-bedroom property in the Greater Richmond area is often around $2,000 to $2,400, depending on the location and type of property. If you could rent for $2,400 a month or own a property for roughly the same monthly payment, why not consider buying? Richmond property values have continued to rise steadily over the past five to ten years. When you own, you’re not just paying for a place to live — you’re building equity over time.

I’ve been in this business for almost 20 years, and most people still talk about living the “American Dream” of owning a home. But that dream doesn’t always start with the perfect house. My wife and I bought our first home—a 1,200-square-foot condo in Falls Church (I loved that little Lee Oaks Pl condo!)—based on what we could afford at the time, not based on what our parents or friends owned. 

I’m sure I don’t need to remind anyone that the teacher salary I was earning during those early buying years wasn’t very high, which is why I was working two jobs at the time. Every buyer needs to focus on what works for their own budget — not their future budget and certainly not the “keeping up with the Joneses” budget. You start with what you can afford. As you build equity and your lifestyle or needs change, you use that equity to move into the next home.

That’s exactly what the majority of people I’ve helped over the years have done, as long as they stayed disciplined with their finances.

So here’s the simple message:

Find something to buy that fits your budget today. Stay the course, build equity, and upgrade when the time is right. And if renting is what makes sense for you right now, that’s perfectly fine too. Just make sure you’re budgeting and saving so that when the opportunity to buy comes along, you’re ready for it.

Lastly, I want to be clear about something. I’m not trying to persuade or talk anyone into anything here. Honestly, I just get tired of reading articles from large media companies that don’t always paint the full picture, or that try to scare people away from what might still be the best decision for them.

That’s why you’ll always hear me say at the end of my posts, emails, and conversations: I’m here to discuss what works best for you. Let’s make a plan that aligns with your goals and what you’re hoping to accomplish. I say that because I know every situation is different for every person — a sentiment I wish the media could grasp as well.

Every move starts with a conversation

Let's talk! I’ve proudly served the Greater Richmond area as a full-time Realtor for more than 19 years, and I’ve called Virginia home for over 25.

My goal is simple: to help you reach yours.

Jason Burke
+1(804) 291-6676
jason@brgreal.com