Housing Market Trends
More inventory has led to more transactions in the Washington D.C. metro area. For three consecutive months, the number of active listings has trended higher than last year. At the end of April, there were 6,569 active listings, which is 21.8% higher than April 2023.
Buyers continue to purchase homes, and closed sales surpassed what they were last April (+7.4%). Pending sales also improved, up 4.0%. This is the first year-over-year increase in new pending sales since February 2022.
The median price in the Washongton DC metro arae was $640,000 in April 2024, which is a new record. Median sales prices for detached homes and townhomes were both at record highs, while condo prices were slightly below the February 2024 high.
Market Outlook
The sustained low number of new listings relative to demand is the primary reason home prices continue to rise, especially in the case of single family homes.
Where are prices going? As long as supply remains low relative to demand, upward pressure on prices will continue. The gridlock in inventory will likely continue until mortgage rates decline enough to incentivize US homeowners with <4% mortgages to put their properties on the market (many experts suggest 5.5% as the magic threshold). However, a substantial reduction in mortgage rates will likely result in increased demand for still-limited housing inventory, adding additional upward pressure on prices. The answer? If you plan to hold a property for 5-10 years or more, buying real estate today is better than waiting until later. If you want to sell your home, sellers have a lot of leverage in the current market.
Fannie Mae revised their mortgage rate forecast yet again, predicting average 30-year fixed mortgage rates in the low 6's in Q4 of this year. (see chart below). Earlier in the year Fannie Mae had predicted sub-6% for average 30-year fixed rate mortgages.
Persistent Low Inventory:
