As Mortgage Rates Hit Nearly 4-Year High, the DC-Area Market Feels the Chill

• October 2nd

by UrbanTurf Staff

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Buyers hoping for a more forgiving autumn got a reality check this week, as the average rate on a 30-year fixed mortgage climbed to 7.28%, its highest level in nearly four years. 

The timing is rough for the fall market, and the latest Bright MLS numbers show buyers are already stepping back. In the DC region, showings fell 17.6% year-over-year for the week ending September 27, while new purchase contracts dropped 19.5%. Across the Bright MLS footprint, both showings and contracts hit four-year lows for the week.

The deals that are getting done are taking longer to come together. Homes that went under contract in the DC area last week typically sat on the market for 34 days, five days longer than a year ago, and the number of sellers who pulled their listings off the market jumped 42%. The pullback is sharpest in the suburbs: new contracts in Loudoun County fell 35%, Fairfax County dropped 28.5%, and Montgomery County slid 27.4%. In the District itself, showings fell 21%, though contracts held up better, slipping just 5.8%.

Meanwhile, the supply of homes for sale keeps rising and prices may be reversing course. Active listings in the region climbed 20.3% from a year ago. The median list price for new listings was $614,950, down 3.2% from a year ago, a sign that sellers are coming to market with more realistic expectations. 

To be clear, this is only one week of data, but the drop in showings, the longer time to contract and the growing inventory are likely telling of the direction the market is heading. Whether that holds will depend largely on rates. If they stay near 7.3%, expect more patience from buyers and more price flexibility from sellers heading into the winter. If they ease, some of the pent-up demand could return.

This article originally published at https://dc.urbanturf.com/articles/blog/as-mortgage-rates-hit-nearly-4-year-high-the-dc-area-market-feels-the-chill/25060.