Did January Mark The Bottom For The DC-Area Housing Market?

• February 10th

by UrbanTurf Staff

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The DC-area housing market may have hit bottom in January as there are early indications that spring could be busy.

The latest report on the DC-area housing market from Bright MLS found that closed home sales fell 10% year-over-year in the region in January, with sales dropping to the lowest level on record for the month. However, the number of homes to go under contract rose about 2%, marking the first time since May that pending sales increased.

“This could be an early sign that demand is returning as mortgage rates ease from their 2025 peaks,” the report stated.

In addition to dropping rates, an increased inventory of homes for sale could create a more active market. In January, buyers had significantly more options than they did a year ago, with active listings up 18%. The combination of rising inventory and soft demand gave buyers more negotiating leverage than they've had in years, though conditions varied widely across price points and property types.

An obstacle to a resurgent spring market could be prices. The region's median home price climbed 4.8% year-over-year to $585,000 in January. In DC and Arlington, home prices were up 18% and 15%, respectively. Buyers in the region could continue to hold back if prices remain elevated. 

"The spring 2026 housing market in the Washington, D.C. region is likely to be more active, as mortgage rates come down and inventory improves," the report concluded. "However, ongoing economic uncertainty could make both buyers and sellers more cautious."

This article originally published at https://dc.urbanturf.com/articles/blog/did_january_mark_the_bottom_for_the_dc-area_housing_market/24304.