Washington, D.C. Market Key Findings - June 2021 / June 2022

Typically, April in the Washington D.C. metro area brings out cherry blossoms and home shoppers, While flowers are blooming, elevated mortgage rates, high home prices, and economic uncertainty have led to a cooler spring market in the Washington D.C. metro area.

Sales activity continues to track below last year’s pace, and the April bump in closed and new pending sales was much lower than a typical March-to-April increase.

The median home price in the metro area fell modestly in April, the 2nd month in a row of falling prices. Prices have come down from peak levels, but the median price is still nearly 30% higher than it was before the pandemic.

For months, inventory in the Washington D.C. region had been rising, but the number of active listings fell in April, down 4.1% compared to a year ago. Supply in the region is less than half of what it was before the pandemic.

The Washington D.C. metro area’s spring market is slower than typical, though low inventory still makes the market feel competitive to buyers. Several factors will drive housing market conditions for the rest of 2023. Mortgage rates will likely remain in the 6 to 6.5% range. Home prices will continue to fall from peak levels, but prices will not come down significantly from a year ago. As a result, housing affordability will still be a challenge this year, particularly for first-time homebuyers.

Many discretionary sellers have been sitting on the sidelines as many homeowners have locked in extremely low mortgage rates and they are not enticed to move and take on a higher rate. Inventory has tightened this spring but could loosen in the second half of the year, as more homeowners are compelled to move, but inventory is still going to be constrained.