Where D.C.'s housing market stands heading into 2024
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Two-decade-high mortgage rates and an inventory crunch shaped Washington's 2023 real estate market.
Why it matters: A year that saw record-low housing affordability is coming to an end.
What they're saying: "Interest rates were a big deal," DMV-based agent Daniel Heider tells Axios. But, he says, the biggest challenge for D.C.-area buyers was inventory.
The big picture: Mortgage rates sidelined many buyers in 2023, but a growing share of buyers bought in cash.
- "There's a lot of wealth here," Heider says. And life events, like getting married or having a baby, force people to make housing decisions — despite mortgage rates or market conditions.
- "Come hell or high water, people are choosing to purchase real estate," he says.
By the numbers: Home sales slowed in D.C. and across the metro, but low inventory propped up prices in 2023.
- In D.C., home values have appreciated roughly 22% since January and are up 3.5% from this time last year, per Redfin.
- Inventory is down 21% from last year across the region.
Yes, but: If mortgage rates fall, 2024 will be a competitive market with higher home prices and multi-offer scenarios, Heider predicts.
Zoom out: U.S. home sales have cratered as many homeowners clamp down on their lower mortgage rates.
- "If there's nothing out there for me to buy, why would I sell? We are all kind of stuck in that paradigm right now," chief economist Matthew Gardner at Windermere Real Estate said at a November conference.
What we're watching: Mortgage rates would need to slide significantly to loosen homeowners' golden handcuffs and boost listing activity, real estate experts say.
- America's housing shortage is particularly concerning for the wave of younger millennials and Gen Zers in the homebuying pipeline, Gardner said.