The Washington DC metro area is witnessing a remarkable surge in home listings, with a 56% increase compared to last year, driven by both new listings and decreased buyer activity. This follows significant inventory gains throughout early 2025, amid a national decline in mortgage rates that also fosters increased inventory. Despite this spike in listings, challenges loom due to federal employment shifts, with prices in the area dropping as supply rises. Chief economist Danielle Hale notes the potential ripple effects on markets with high federal employment.
The adjustment period following federal layoffs and funding cuts has likely put some Washington DC home searches on hold, both for those whose jobs have been directly impacted and those who may be concerned about what's ahead, and the data hints at these challenges.
While DC has the largest share of federal workers in the country, other highly federally employed markets could see similar effects from the current economic shifts.
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