The 3 Most Important Things To Watch In The Spring Housing Market

With the official beginning of spring, UrbanTurf is taking a look at what we think will be the three most important metrics to watch in the DC-area housing market in the coming months. 

As mass federal layoffs began earlier this year, there were erroneous reports that a flood of homes were hitting the market in the DC region. While the chart above shows that, in fact, fewer new listings hit the market in January and February than a year ago, this metric will be one of the more important to watch in the coming months to see if the changing financial picture of homeowners results in a decision to put their home on the market.

In February, the median home price in the DC region was $597,000, a 6.6% increase compared to last year, and nearly 40% higher than 2020. However, home price appreciation is likely to slow in the coming months if more listings hit the market and affordability constraints begin play a larger role. We may already be seeing a slowdown: A recent weekly report from Bright MLS shows that the median list price across the region was down 0.8% week-over-week, and up only 2.2% annually. 

Long-term mortgage rates have been falling for the last two months. The problem for homebuyers is that during that time rates have only dropped about 30 basis points, from about 7% to 6.6%-6.7%. Is that enough movement to get buyers off the sidelines? Maybe. Last week, the number of new pending contracts in the DC area was up 7.4% compared to a week ago, and was 1.5% higher than the same week last year. Whether or not that momentum continues will be based somewhat on the direction of the chart above.