Washington, D.C. Housing Supply Rose 23% in June—One of the Biggest Jumps on Record

Redfin reports inventory is increasing in the nation’s capital faster than it is nationwide partly because some former federal workers are trying to offload their homes

The total number of homes for sale in the Washington, D.C. metro area rose 22.7% year over year in June, the third-biggest jump in records dating back to 2012. That’s according to a new report from Redfin, the real estate brokerage powered by Rocket. Only the two prior months saw bigger increases: In April, listings rose 23.9%, and in May, they rose 25.5%.

Pending home sales in Washington, D.C., meanwhile, fell marginally (-0.3%) from a year earlier.

The homes that are selling in the nation’s capital are taking longer to do so than in the past; the typical D.C. home that went under contract in June did so in 36 days, up from 26 days a year earlier. That’s one reason total inventory is rising; stale listings are piling up. Additionally, fewer homes are selling above asking price: About one-third (35.7%) of homes sold over asking price, down from nearly half (47.8%) a year earlier.

Widespread layoffs of federal employees and budget cuts for programs that rely on government funding have reshaped Washington, D.C.’s housing market. In addition to layoffs, some former federal workers have taken buyouts or early retirements. Some have listed their homes because they’re moving to a different area, and/or they’re unable to afford their payments because they’re no longer employed. In addition to pushing housing supply up, those job cuts and uncertainty about Washington, D.C.’s economy are also dampening homebuying demand.

“The local market is recalibrating and the pace of sales is slowing, partly due to federal job cuts,” said Marshall Park, Redfin’s senior market manager in Washington, D.C. “For sellers, that means they have to be strategic about pricing, staging, and marketing—and they need to be realistic about what they’re going to get for their home. But buyers have a window of opportunity: More inventory means they’re able to be patient and picky, and they’re sometimes able to negotiate prices down and get concessions from sellers.”

Move-in ready, fairly priced single-family homes in desirable locations are still selling quickly with multiple offers, Park said. It’s also worth noting that the majority of D.C. residents don’t work for the federal government and their finances aren’t directly dependent on the current administration.

Washington, D.C.’s Housing Market Is Reflective of National Trends

Rising inventory and flat sales are reflective of a larger nationwide trend, though the number of homes for sale is rising faster in D.C. than nationally. In the U.S. as a whole, total supply rose 13.3% year over year in June, and pending sales fell 0.8% (versus +23% and -0.3%, respectively, in Washington, D.C.).

Inventory is increasing and demand is lackluster nationwide for several reasons. One, record-high home prices are encouraging homeowners to sell and discouraging house hunters from buying. Two, economic uncertainty about things like tariffs and a potential recession are scaring off would-be buyers from making a major purchase. And three, the mortgage-rate lock-in effect has started to ease, as people who bought with ultra-low rates are starting to sell their homes.

Inventory is likely rising faster in Washington, D.C. than nationally because its economy is so closely tied to the federal government, in which job security is uncertain.

D.C. Home-Sale Prices Are Starting to Fall

Home prices in Washington, D.C. are starting to take a hit as inventory outpaces demand. Redfin’s Home Price Index shows that prices of single-family homes in the nation’s capital fell 1.8% from a month earlier in June on a seasonally adjusted basis, the second-biggest decline on record (the biggest was a 1.9% decline in May). It also marks the third month in a row where D.C. prices declined at least 1.5% month over month.

Prices are still rising on a year-over-year basis. The median home-sale price in D.C. was up over 2% year over year in June.

On the rental side, prices are holding up, with the median D.C. asking rent rising 1.5% year over year in June. That’s compared to a 0.5% decline nationwide. Rents are rising even though sale prices are faltering, partly because demand for rentals in the area remains healthy. Many government workers prefer to rent because they’re unsure how long they’ll hold onto their jobs.

New Listings Are Stagnating

While the total pool of housing supply in Washington, D.C. is growing, new listings are stagnating. New listings were essentially flat (0.3%) year over year in June, just the second time in 15 months new listings haven’t posted a meaningful increase.

Some would-be sellers in D.C. are opting against putting their homes on the market because they’re taking note of the buyer’s market. The slight decline in D.C. listings reflects a trend that is happening nationwide, though D.C.’s decline is smaller. In the U.S. as a whole, new listings are down 3.4% year over year. Prospective sellers in many parts of the country have pulled back, opting to stay put or rent out their homes instead. That’s especially true for sellers who would potentially take a loss if they sold now.

If new listings in Washington, D.C. start dropping off at a higher rate, the surplus of supply will start depleting and buyers will lose their edge.

To view the full report, including charts, please visit:

https://www.redfin.com/news/washington-dc-housing-supply-increases

About Redfin

Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin’s clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent.

You can find more information about Redfin and get the latest housing market data and research at Redfin.com/news. For more information about Rocket Companies, visit RocketCompanies.com.

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