D.C. house-hunters hibernate this summer
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The saying typically goes "when the fireworks go off, the sales go down" but that's not the case this busy season, DMV agent Russell Brazil tells Axios.
Why it matters: DMV housing market activity dried up early this year, with mortgage rates primarily to blame.
State of play: As of May, new listings were up 7.4% in the DMV, while pending home sales and closed sales were down 20% and 10.5% respectively, data show.
- Inventory stats are slightly misleading, Brazil says. There's a surplus of condos on the market, and very few single-family homes or townhouses.
What they're saying: Sellers and buyers need to see mortgage rates fall before they make a move. That magic number seems to be somewhere in the high 5s or low 6s, Brazil says.
Yes, but: There are plenty of deep pockets in Washington, unimpacted by high mortgage rates. Nearly 1 in 4 home sales is made in all-cash in Montgomery County, Brazil says. In a more balanced market, that share is closer to 15%, he says.
- Pro tip: Buyers who need to secure financing should be pre-underwritten— not just pre-approved —to help compete with the cash buyers, he says.
What's next: Elevated mortgage rates, which are dampening the appeal and affordability of home buying, could remain higher for longer.
- The Fed signaled in June that only one interest rate cut is coming this year.