The first half of 2023 witnessed a shifting market...

from the boom years of 2020, 2021 and the first half of 2022.

Throughout the Washington D.C. metro area, stubbornly high mortgage rates affected both buyers and sellers. Buyers found affordability to be the primary issue, with the costs of purchasing and maintaining a home to be significantly higher than in recent years.

On the other hand, many sellers were able to lock in low mortgage rates before inflation and the end of quantitative easing sent rates soaring in mid 2022.

For example, 62% of US homeowners have a mortgage rate below 4%, and 24% have a rate below 3%. Homeowners are reluctant to give up their low mortgages, and as a result are staying in their current homes much longer. This has kept the inventory of homes for sale at five-year lows in 2023 across the DMV.

The scarcity of homes for sale in the first half of 2023 had two major effects. First, prices have remained steady even though demand has ebbed slightly. While there are variations across each individual submarket, prices across the metro area remained flat in the first half of 2023 when compared to the same period in 2022. Second, with less inventory as noted above, the total number of transactions fell 25% in the first half of the year.

The second half of 2023 will, for the most part, be contingent on mortgage rates and the strength of the regional economy. Inflation appears to be moderating, and this will lead to lower mortgage rates and an increase in inventory over time.

With that said, assuming the regional economy remains healthy, there is still pentup demand from buyers who are holding out for lower rates.

With the power of one of the world’s most recognized brands, exceptional marketing, and an expansive footprint both globally and across the Washington, DC region, the professionals at TTR Sotheby’s International Realty are well prepared to guide you through this dynamic market. CONTINUE TO

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