Rumors of a hit to the Washington, D.C., housing market have swirled for months as Trump administration actions to shrink the federal workforce coincided with stark housing affordability pressures.
A shutdown of the U.S. government that commenced on Oct. 1 and is into its second week adds uncertainty for buyers and sellers across the D.C. metropolitan area at the same time the number of for-sale listings continue to pile up.
Closed sales across the region totaled 18,607 in September, a 6.2% rise year over year, according to a monthly housing report from Bright MLS, the second-largest multiple listing service in the U.S. with a market spanning from New Jersey to Virginia.
Lisa Sturtevant, chief economist at Bright MLS, attributes the rise to easing mortgage rates last month, warning that broader uncertainty remains a wrinkle to be ironed out.
Roughly 150,000 federal workers who opted into the Trump administration’s deferred resignation program fell off federal payrolls as of Sept. 30 — the day before the government shutdown began — adding to the thousands of federal workers fired en masse through the first and second quarters of this year.
Ahead of the shutdown, the White House’s Office of Management and Budget issued a memo alerting federal agencies to prepare for additional large-scale reductions in force in programs whose funding lapses and are not consistent with administration priorities.
Today, many federal workers will see their final paycheck until lawmakers vote to reopen the government. Earlier this week, however, President Donald Trump threw into question whether all furloughed federal employees would receive full backpay — or any backpay — for working through the shutdown.
Sturtevant stated in a press release that some buyers were being brought back into the market due to lower mortgage rates in August and early September. But she also stated: “In places where the federal government has a strong presence, such as D.C., we’re already seeing the impact of the shutdown and job insecurity.”
Pending home sales contracts were only 0.5% higher in September than a year ago, even though inventory has expanded quickly. New listings rose 9.7% in September while the total number of active listings at the end of the month was 27% higher year over year.
Rising supply has cooled price growth, the Bright MLS report also notes. The median final sale price in the Mid-Atlantic region was $419,900 in September, 2.4% higher than last year, marking the slowest pace of growth in more than two years.
“Sellers are adjusting to a new market reality,” Sturtevant added, and that new reality requires patience. The median number of days homes spent on the market rose to 18 last month, five days longer than last year, reflecting the increased optionality buyers have across the D.C. metro market.
“However, the Washington, D.C., area is showing us how sensitive the market is to broader economic and political uncertainty,” Sturtevant concluded.
