DC Real Estate Market Update
JAN 2026
January Market Update: New Home, New Year in Washington D.C.?
A new year brings a reset for the housing market—and in Washington, DC, early signs point to a calmer, more balanced landscape for buyers and sellers alike.
Mortgage Rates & Buyer Momentum
Mortgage rates are starting 2026 hovering in the low-6% range, offering modest but meaningful relief after years of volatility. Nationally, mortgage applications jumped sharply in January, with purchase applications up nearly 9% week over week and refinances surging more than 40%. That momentum is showing up locally, too, as buyers re-enter the market with renewed confidence. While rates aren’t “cheap,” stability matters—and predictability is bringing shoppers back.
Inventory & Pricing: A DC Reset
National forecasts call for 2–4% price growth in 2026 (NAR), but the DC area may chart a slightly different course. Bright MLS projects higher inventory and a 1–3% price adjustment across the region, signaling a reset rather than a downturn. More homes on the market means buyers have options, while sellers face a more competitive, price-sensitive audience. Well-located, efficiently sized homes—especially rowhomes and condos—continue to attract steady demand.
Small Homes, Smart Living: The Happy Home Factor?
Affordability remains top of mind. With buyers projected to spend less than 30% of income on housing for the first time since 2022, many are rethinking what they really need. Smaller, smarter homes—easier to maintain, lower to heat and cool, and better aligned with urban living—could gain appeal, and studies prove, they make people happier! In DC, this trend favors classic Capitol Hill rowhomes, and thoughtfully designed smaller spaces that prioritize livability and community over excess. See our recent Facebook posts on this data, and follow our page while you’re there!
What It Means Going Forward
2026 is shaping up as a year of normalization. Buyers gain breathing room. Sellers must price and present strategically. And in DC, the sweet spot may belong to homes that balance location, efficiency, and value.
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