With the first day of fall arriving this week, the fall housing market is officially here. UrbanTurf looked at what we think will be the three metrics that will determine the direction of the DC-area market in the coming months.
DC-area home prices have been hitting new highs annually for almost a decade. However, unlike past years, record prices aren’t dampening sales in 2020. As the chart above shows, both home prices and home sales were at decade highs in August. If the frenetic sales pace continues into the fall, the supply of homes for sale will continue to drop unless a glut of new listings come on the market.
A year ago, there was a two-month supply of homes for sale on the market in the DC region. Since then, the for-sale inventory has been below the two-month mark every month, hovering around the 1.3-month mark for the last several months. A notable increase in new listings in August didn’t increase supply and with interest rates low, the inventory of homes for sale will be an important metric to watch as we get into the fall market.
It’s becoming a refrain that we find ourselves writing almost every week: interest rates have never been lower. Long-term rates have been below the 4% mark since last June and have been below 3% since late July, hitting a new low of 2.86% just two weeks ago. The low rates are enticing buyers to come into the market in droves, a trend that will likely accelerate if rates continue to drop.