Six weeks into the new year: while we are still navigating snow banks, uncollected trash bins, and driver stand offs, we're seeing a lot of strength in this early spring market.
Buyer demand is responding to cheaper mortgage rates. Nationally, pending sales are edging higher, and the pace of new inventory growth is slowing down.
If you’re in the camp expecting a big surge of supply this year, it’s worth watching the data closely. The story so far says otherwise.
The inventory gap that defined 2025 is shrinking every day. Last year, inventory was growing at a 30% clip. Today, that growth rate has cooled to just 8.7%.
Here in Northwest Washington, DC, the change is even more pronounced - especially at the top of the market. Inventory growth in the upper brackets is now below 5%.
At the moment, there are 112 single-family homes priced above $2 million. At this time last year, there were 107. In other words, supply at the high end is essentially flat.
Meanwhile, serious buyers aren’t waiting for better weather. Despite snow, ice, and freezing temperatures, 136 single-family homes have gone under contract so far this year. Last year at this time, the number was 160 - only about 17% higher.
In practical terms, demand is holding up far better than many expected.
If this slowdown in inventory growth continues, we could be looking at actual inventory declines by summer compared to last year. And that brings us back to one of real estate’s oldest rules of thumb:
Rising rates tend to create rising inventory.
Falling rates tend to create falling inventory.
That shift is already underway.
Bottom line: this is a very different market than the one we saw a year ago.
