As the year begins, UrbanTurf is taking a look at the three charts that will dictate the path of the DC-area housing market through the spring.
Between August 2022 and November 2023, long-term mortgage rates rose from 5% to 7.8% putting a huge dent in home sales volume around the country. Since November, these rates have dropped back to around 6.6%, creating a sense of optimism that home buyers and sellers alike will begin to venture back into the market. If consensus holds, the feeling is that rates will continue to drop in the coming months which will likely bolster activity in the market.
The path of rates will likely be a critical factor in one of the biggest questions facing the market this year: Will we see more homes come on the market? The inventory of active listings in the Mid-Atlantic fell in each of the final six months of 2023, leading to an inventory of homes for sale that was 50% lower than in 2019. A recent Bright MLS survey found that about 40% of agents who worked with multiple sellers had one of them decide not to list their home, due to either higher rates, needing to find another home without many options available, or not being able to get the price they wanted. A housing report out next week will be telling for where inventory is going in the DC region as the year begins.
As listings fell for the final six months of the year, home prices rose. In November, home prices in the DC region increased in all but two jurisdictions, and the median home price ended 2023 nearly 30% higher than before the pandemic. Something will need to change in the dynamic between high prices and high interest rates in order to kickstart the market this year.
Thumbnail image of photo that sold in Maryland last year. Courtesy Constance Gauthier.
This article originally published at https://dc.urbanturf.com/articles/blog/the_3_most_important_charts_for_the_dc-area_housing_market/21831.
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