The Washington, D.C., metropolitan area has long been one of the most competitive and expensive places to buy a home. The region’s median listing price is as high as $600,000, and inventory has never rebounded from its pandemic lows, spurring intense competition and frequent bidding wars in recent years.
President Trump’s efforts to dramatically reduce the size of the federal government, the region’s main employer, threaten to upend that dynamic. While brokers and economists say the first spring homebuying season of Trump’s second term was largely business as usual, some signs of weakness are starting to emerge.
Home showings are down, and sellers are more willing to accept price cuts. The market remains firmly tilted toward sellers, but buyers are trickling in, and many brokers say they are preparing for the possibility of slower sales and lower prices in the coming months.
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“I think sellers should list their homes as soon as possible,” says Dustin Fox, head of the Fox Homes team in Fairfax, Virginia. “I could be wrong, and your prices could continue to go up, but that’s not what I’m seeing right now.”
The D.C. metro area, with more than 6 million residents, covers all of Washington state, several counties in Maryland and Virginia, and a small portion of West Virginia. It’s one of the wealthiest places in the country — several counties in Maryland and Virginia rank among the top 10 highest-income counties, with median household incomes exceeding $120,000. It’s also the most educated, with more than half of residents having at least a bachelor’s degree.
Historically, the region’s affluence and education have helped it weather recessions better than average. The stability of government jobs is also a plus: Nearly one in five workers in the region is employed by the federal government, and countless more work in related fields, such as government contracting or nonprofits funded by federal grants.
“It’s crazy”
This time around, Trump’s massive government cuts threaten that long-standing foundation of stability. Tariffs and broader signs of a recession are also making buyers and sellers nervous. For now, it’s hard to tell how much of the slowdown stems from concerns about the latest layoff targets for the Department of Government Efficiency or from broader concerns about the broader economy or market volatility spurred by tariffs.
Jack Wang, principal at PowerHouse Realty Group in Chevy Chase, Maryland, said the government rollbacks aren’t directly tied to the deals he’s seen recently in Maryland. Still, his spring deals are off to a slow start, which he attributes to general uncertainty.
“Buyers have to find a home they absolutely love so they can take the inherent risk of buying and making a big purchase,” he said.
Buying a home in the D.C. metro area can be a challenge even for people with relatively high incomes. Home prices in the region have risen sharply since the pandemic, and are still about 30% above their late 2019 levels, with an average home price of $605,000.
Housing costs vary widely in the region’s sprawling suburbs, depending on factors such as proximity to public transportation and the Capital Beltway. Many of the inner-city suburbs have median listing prices of more than $1 million. Available listings are also diverse, ranging from historic townhouses throughout the city center to brand new single-family projects in the outer suburbs.
While for-sale inventory is increasing, there were only about 10,000 homes on the market in March, a level that remains well below historical norms.
In suburban Virginia, Fox said he has noticed an increase in seller activity since the DOGE-related cuts began. He recently listed homes on behalf of a fired FBI agent and a diversity, equity and inclusion specialist. He has also seen buyers become hesitant and choose to pause their searches due to factors such as uncertain job contract status or tariff concerns.
Uncertainty prevails
But the layoff effect is not showing up in broader housing market data — at least not yet. Lisa Sturtevant, chief economist at Bright MLS, a North Bethesda, Maryland-based multiple listing service serving the Mid-Atlantic region, said she is watching for potential leading indicators, such as the share of listings with price declines. Bright MLS is a North Bethesda, Maryland-based multiple listing service serving the Mid-Atlantic region. She said those indicators are rising in the region, which could be “a bit like a DOGE effect.”
Other indicators of a slowing economy, such as a drop in contract activity, are also widespread in other East Coast housing markets, making federal layoffs unlikely to be a driving factor. As of last week, pending sales of new homes in the D.C. region were down 3.3% from a year ago, while the broader Bright MLS region, which includes Philadelphia, Delaware and Baltimore, was down 3.7%.
“There’s a lot of uncertainty, but so far we haven’t seen an overall big, noticeable impact on the D.C. region housing market from federal workforce changes,” Sturtevant said.
When Kirsten Craft and her husband were house hunting earlier this year, she cast a wide net, searching Washington and the inner-ring Maryland suburbs of Takoma Park, Silver Spring and College Park for homes with backyards for the dogs and parking for a camper.
She was surprised by the competition she still faced, given high mortgage rates and economic uncertainty. Ultimately, they bought a house in another neighboring suburb, Riverdale Park, Maryland, for $50,000 above asking price and dropped strings, beating out seven other offers.
“I was really surprised how competitive it was, to be honest,” said Kraft, 33. “The D.C. real estate market is crazy.”
In nearby Montgomery County, Maryland, Susan Wood, 62, and her husband are taking their time house hunting amid signs that the market is beginning to turn. Many of the homes they’ve looked at in the county and in northwest Washington have languished on the market and dropped in price. She expects more listings to come online as uncertainty persists.
“I do think the market will soften,” she said. “We want a house, but we’re not in a rush.”
