The Washington D.C. metropolitan area is witnessing a notable surge in home inventory as the spring housing market approaches, as outlined by Realtor.com. This increase has been particularly pronounced when compared to national trends.

Data from early 2024 shows that the inventory of available homes in D.C. has seen considerable growth, with January and February marking year-over-year increases of 35.9% and 41%, respectively. This trend follows a previous period from June to December 2023, during which active listings were already 20% to 30% higher than the same timeframe the year before. As of the last reported week, active listings escalated to 56% compared to the previous year.

According to Danielle Hale, chief economist for Realtor.com, the uptick in inventory may be influenced by adjustments following a series of federal layoffs and funding reductions. “The adjustment period following federal layoffs and funding cuts has likely put some Washington D.C. home searches on hold,” Hale noted.

In contrast, nationwide, active listings increased by 28% in the same week, coinciding with a drop in mortgage rates. The typical rate for a 30-year fixed mortgage decreased from approximately 7.25% in mid-January to about 6.82% recently, as reported by Mortgage News Daily.

While new listings contributed to the growth in available homes, the rate of increase was outpaced by the total inventory growth. New listings climbed by 24% year-over-year this past week, indicating a rise in properties for sale, while also decreasing the median days homes spend on the market. Year-to-date, new listings have surpassed the previous year’s figures by 11.9% but remain 12.8% lower than those recorded in 2022.

Additionally, a significant factor in the inventory boost appears to be the influx of newly constructed condominiums and townhomes, reflecting an active construction environment over the past few years. The current market has seen a shift towards a greater proportion of new construction listings being condos compared to five years ago.

Despite the increase in listings, home prices in the D.C. metropolitan area have also shown adjustment trends. The median list price recently recorded a year-over-year decrease of 1.6%. In comparison, the median list price national average declined by 0.2%, although a closer look shows a 1.2% annual increase in median list price per square foot, suggesting a higher availability of smaller or lower-priced homes this year.

While D.C. has a unique demographic consisting of a large percentage of federal employees, similar shifts in housing inventory may emerge in other markets with high federal employment. Hale anticipates that while many residents may adapt and seek new job opportunities within the area, some will likely opt to explore employment options elsewhere or consider retirement.