DC Area Home Inventory Rises as Fall Sales Hit a 20 Year Low

Rising mortgage rates have slowed the Washington, DC, area's fall housing market, with completed home sales declining 8.4% from a year earlier to their lowest September total in nearly 20 years. Bright MLS's September housing market report also recorded fewer new contracts and property showings, while unsold listings accumulated across the region as buyers retreated.

According to Bright MLS, new pending sales dropped 17.1% year over year, while property showings fell 16.9%. The report attributed the slowdown primarily to higher mortgage rates rather than federal government workforce cuts, with declines affecting nearly every local jurisdiction.

Despite weaker transaction activity, the region's median sale price edged up 1.6% year over year to $610,000. Bright MLS attributed the increase largely to a shift in the mix of homes sold, with more expensive detached houses accounting for a larger share and fewer townhomes and condominiums changing hands.

Detached homes recorded a median sale price of $785,000, an increase of 2.6% from the previous September. Sales in that segment nevertheless declined 4.7%, according to the report.

The supply of homes for sale expanded as buyer demand weakened. Active listings increased 20% year over year, pushing inventory above pre-pandemic levels, while the region's months of supply rose to 3.22 from 2.65.

New listings remained nearly unchanged, declining 0.3% from a year earlier. However, new properties entering the market outnumbered newly pending sales during September, contributing to the accumulation of unsold homes, Bright MLS reported.

Conditions varied across the region. In Washington, DC, the median sale price fell 2.9% to $660,000, and homes took a median of 36 days to sell, the longest period among the jurisdictions covered by the report. The district also had nearly six months of housing supply.

Alexandria recorded an 11.4% decline in its median sale price to $660,000, while Arlington's median fell 4.6% to $655,000. Fairfax County moved in the opposite direction, with its median sale price climbing 5.6% to $749,750.

Sales activity also differed by county. Frederick County was among the few local markets to record an annual increase in completed transactions, with sales rising 8.8%. In Loudoun County, active inventory increased 34.1% year over year, Bright MLS reported.

Bright MLS expects some local markets to experience year-over-year price declines during the fall season, although its outlook does not anticipate significant drops. The report's figures indicate that rising inventory and weaker buyer activity are creating different pricing conditions across the Washington metropolitan area's local markets.