Is the housing market in the nation’s capital changing? According to Altos data, the dynamic in Washington has shifted since the beginning of Trump’s second term.
Currently, housing supply in Washington is on the rise. After years of stagnant inventory, the weekly average of homes for sale has increased by 34.8% year over year, while new listings have spiked by 9.3% on a 90-day rolling basis.
Although new listings typically rise every spring, the sharp uptick is significant. The shift from a 10.9% year over year decrease in the last week of February to a decisive positive increase indicates a notable rise in new listings relative to the previous year.
Despite the increase in options, buyers are not entering the market at the same pace as inventory is rising. Pending new sales on a 90-day rolling basis have been negative on an annualized basis since February after a strong finish to 2024.
Sellers have responded by lowering prices. The trend of listings with price reductions being higher than those with price increases has shifted this year.
The rise in listings with price increases during the fall of 2024 has decreased by 23.7%, while listings with price cuts have increased by 17.1%.
There are questions about whether federal layoffs are impacting Washington’s housing market, but it’s important to consider various factors before drawing conclusions.
First, rising new listings and inventory are part of a seasonal trend seen in many markets across the country. Sales are increasing, just not as rapidly as in 2024.
Second, the extent of layoffs and their impact on the market is uncertain due to the constantly changing status of federal agencies.
Other actions by the Trump administration, such as new tariffs and economic instability, might also be influencing sellers and buyers in the market.
Additionally, mortgage rates have increased to 7%, potentially deterring homebuyers from entering the market.
The significant growth in supply in Washington, D.C., is evident by the substantial increase in inventory and new listings compared to the previous year.
It may take time to see the full impact of new federal policies and changes in the workforce on the housing market. Currently, there is an imbalance between supply and demand in Washington, D.C.