Local Real Estate Market Update
FEBRUARY 2025
FEBRUARY 2025 MARKET DATA
With external economic forces creating some uncertainty, we’re turning to the numbers to see how the local DC real estate market and more specifically, the 20002 and 20003, is trending.
HOME DEMAND
The Washington D.C. Metro Home Demand Index (HDI) for this period is 63, up from 50 last month, signaling increased market activity. While demand is still slightly below last year’s index of 64, the steady increase from January suggests buyers are returning to the market despite economic pressures.
- Condos priced above $590K saw the most significant demand increase – but every home category shows an increase in demand in the DC area.
- Inside the District, new listings were steady weekly in February, and show an uptick in the last week of the month —a clear sign that the spring market is beginning. This is true for both Fee Simple homes, and condos.
Of the active homes and condos in both 20002 and 20003, fewer than 50% have been on the market for 45 days or less. Inventory accumulation in February (5.6 months) is virtually unchanged from this time one year ago, when it was 5.7.
SOURCE: Bright MLS
CAN WE GET A MAGIC BALL ON MORTGAGE RATES PLEASE?
Will rates drop in March? Will rates drop in 2025? We ALL want a crystal ball when it comes to mortgage rates. Here’s the current trend, and what the experts say:
Rates have fluctuated between 6% and 7% over the last year (as low as 6.08% in late September 2024); so far in 2025, they have stayed within the 6.5-7% range. However, we’ve seen a small but consistent downward trend in recent weeks—mortgage rates have inched lower five out of the last six weeks, hitting their lowest level in 2 months this week at 6.76% (Freddie Mac PMMS).
The Mortgage Bankers Association (MBA) has pointed to shifting economic sentiment as a key factor in rate movements. Higher-than-expected January inflation (3%) created some uncertainty, but weaker consumer spending data and cautious economic outlooks have pushed Treasury yields lower—helping to nudge mortgage rates down. This article offers a solid explanation of the factors affecting rates now, and provides updated expert predictions for 2025—both topics are covered toward the end of the article.
👉 Home purchase mortgage applications are up 3% year over year, showing that buyers are still active despite market fluctuations.
Pictured above: A peek inside our currently FOR SALE property at 1422 Potomac Ave SE.
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