The recent fluctuations in mortgage rates have caused concern for many individuals, particularly as the housing market in the DMV prepares for the spring season. However, navigating the confusing data, “expert” predictions, and misleading headlines in the media can be challenging. Here's what you should know about current home prices, inventory, and the spring market expectations in the DMV real estate market.

Home Prices

Price trends across the DMV still vary by market, but according to Nataliya Polkovnichenko, Ph.D., Supervisory Economist at the Federal Housing Finance Agency (FHFA) in the Home Pricing Index report,

“U.S. house prices were largely unchanged in the last four months and remained near the peak levels reached over the summer of 2022. While higher mortgage rates have suppressed demand, low inventories of homes for sale have helped maintain relatively flat house prices.”

The chart below shows the month-over-month home price changes, indicating that any depreciation in price has been relatively mild since the peak in August. In other words, today's home prices are not in a 2008 style free fall. In many areas across the DMV, prices increase, but at a slower rate.

Current Inventory of Listings

The inventory of available real estate in the DMV remains at historic lows and is expected to continue for years to come. This continued low inventory of residential real estate has proven the economic law of Supply and Demand. As long as there are more buyers looking to purchase (demand), then there are of available real estate for sale (Supply), we can expect prices to remain stable or continue to increase. This has continued in the DMV, even with the pressure of increasing rates.

There are several reasons why inventory has remained low, making this a more detailed answer, If you would like these details, please read my article Northern VA Housing Market Inventory Proves The Market is Not Crashing.

What Does This Mean for You?

If you are a current homeowner in the DMV, you may be concerned about even the slightest decrease in real estate prices. However, it's important to keep in mind the significant growth in home values over the last few years. Compared to that growth, any declines are likely to be minimal or non existent. According to Selma Hepp, Chief Economist at CoreLogic,

"While prices continued to fall from November, the rate of decline was lower than that seen in the summer and still adds up to only a 3% cumulative drop in prices since last spring's peak."

If you are a current home buyer on the hunt for the next place to call home, you may be concerned of a pending 2008 style pricing crash. As we mentioned before, with the continued growth of Jobs in the DMV, the demand for good real estate will only grow over the coming years.

It's also crucial to remember that each local market across the DMV is unique, so it's essential to rely on a specialist like the team at J Group for the latest information on home prices in your area if you're considering moving this spring.

Bottom Line?

In conclusion, to understand the current and future state of real estate prices in the DMV and how they may impact your goals of homeownership, reach out to the J Group today.