Axios D.C.

July 08, 2023
Hello, Saturday!
- Turbulent mortgage rates are driving the market right now. Here's how it's impacting inventory in D.C.
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Today's newsletter is 472 words β a 2-minute read.
1 big thing: Golden handcuffs lock up supply
Illustration: Sarah Grillo/Axios
Nearly all (93%) mortgage-holding homeowners in D.C. have a rate below 6%, per Redfin data shared with Axios. That's leaving them locked into place and buyers with few homes to choose from.
Why it matters: Mortgage holders are experiencing the "golden handcuffs" phenomenon β they might have a great rate now, but likely can't move without spending a lot more cash, explains Redfin chief economist Daryl Fairweather.
By the numbers: Only 7.3% of D.C. homeowners with a mortgage had a rate above 6% as of late 2022.
- Meanwhile, about a quarter β 26.6% β had a mortgage rate below 3%.
- And roughly 40% had a rate between 3% and 4%.
What they're saying: For the last 15 consecutive months, fewer listings have hit the D.C. market, president-elect of the Greater Capital Area Association of Realtors Christopher Suranna says.
- Buyers are adjusting to the higher mortgage rates, but homeowners, with their 3% mortgage rates, aren't budging, he said.
Zoom in: Matt Hendrickson refinanced his Chevy Chase D.C. home, securing a 2.6% rate. His monthly payment is now $650 a month lower than it was when he bought it in 2017.
- "Between that savings and the surge in our homeβs equity, we were able to build a weekend home in West Virginia," he said.
- Yes, but: He plans to keep his D.C. home (and sub-3% rate) "for life."
The big picture: The golden handcuffs phenomenon isn't new, but because mortgage rates have more than doubled, it's more stark than ever, Fairweather tells Axios.
Zoom out: It's not just a D.C. issue. Nine in 10 U.S. homeowners secured mortgage rates below 6%, per a national Redfin report. Meanwhile, mortgage rates have swung between 6% and 7% in the U.S. in recent months.
What's next: If mortgage rates drop closer to 5%, homeowners will start to list their homes and D.C.'s market could start to rebalance, Suranna says.
Go deeper: It could take the U.S. a decade to repair its housing shortage
2. π€― Charted: Change in monthly payments

Buying a median-priced home in D.C. requires a lot more cash than it did when rates were lower.
Yes, but: Buyers are also exploring adjustable-rate mortgages or buydowns in hopes of a lower monthly payment, Fairweather says.
3. βοΈ A dreamy outdoor space
Photo: Courtesy of Compass
Always on the hunt for more green space, this week's online real estate search led us to 4900 Chesapeake St. NW.
- The five-bed, 2,750-square-foot home near American University goes for $2.25 million.
Highlights include a fenced-in yard, screened-in porch, white oak floors, two primary bedrooms and a bright, custom kitchen.
- Listed by: Lisa Resch and Dana Rice at Compass.
4. π¬ Send us your thoughts
Illustration: Brendan Lynch/Axios
As we plan future content, we'd love your ideas β after all, we don't have a newsletter without you.
- Are you looking for home and garden inspiration with tips from local experts?
- Do you have any burning questions about our complicated real estate market?
Reply with your feedback.
Our picks:
π Sami is adding two more books to her want-to-read shelf.
π Bri is designing her (nonexistent) dream mountain house.
Thanks to our editor Carly Mallenbaum and copy editor Bill Kole.
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