Local Real Estate Market Update
MARCH 2025
MARCH 2025 MARKET DATA
Buyer Demand and Market Activity
The Home Demand Index (HDI) for the DC Area currently stands at 74, up from 65 last month but slightly below last year’s 76. This month-over-month increase suggests a rebound in buyer interest, but low inventory continues to limit options and moderate overall market activity.
Looking at year-over-year numbers for the 20002 and 20003 areas, the market is showing signs of increased activity.
Fee Simple Homes (Single-Family and Townhouses)
• New Listings are up 31%
• New Contracts/Pendings are up 37%
• Closed Sales are up 6.3%
• Total Active Listings are up 10.5%
This suggests that more sellers are entering the market, and buyers are actively making offers at an even higher rate. The increase in closed sales reinforces the idea that demand remains strong despite higher mortgage rates.
Condos
• New Listings are up 16%
• New Contracts/Pendings are up 31%
• Closed Sales are down 31%
• Total Active Listings are up 14%
For condos, while new listings and pending sales have increased, closed sales are down. This could indicate longer transaction timelines, financing challenges, or increased negotiation between buyers and sellers. However, with a surge in pending sales, we may see a rise in closed transactions in the coming months.
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
Are Buyers Adapting to Current Mortgage Rates?
As mortgage rates continue to hover in the 6-7% range, many have questioned whether buyers are willing to accept this as the new normal. The latest data suggests that buyer activity is picking up, signaling resilience in the market despite ongoing economic uncertainty.
Recent mortgage application data shows that demand rose last week to its highest level in nearly two months. With rates ticking down slightly to 6.71% from 6.72%, buyers appear to be responding to even the smallest shifts in affordability.
Lawrence Yun, chief economist for the National Association of Realtors, predicts that home sales will increase by 6% in 2025 and another 11% in 2026, as mortgage rates gradually decline. He expects rates to average 6.4% this year and 6.1% in 2026, which could further boost buyer confidence. (link)
What This Means for Buyers and Sellers
For buyers, inventory is increasing, which provides more choices in the market. However, with demand also rising, competition may remain strong, particularly for well-priced homes. Mortgage rates remain a key factor, and while they have edged lower in recent weeks, waiting for significantly lower rates may not be the best strategy as prices and demand continue to rise.
For sellers, the market is absorbing new inventory at a healthy pace, especially for fee simple homes, where contracts are outpacing new listings. Strategic pricing and preparation will be critical to attracting buyers in a competitive environment.
As we head into spring, market activity is expected to pick up further. Whether buying or selling, now is the time to plan your next move based on current trends.
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