Market Relief as Interest Rates Drop

Rolling into the fall, we felt a collective sigh of relief from the market when the FED finally implemented the much anticipated interest rate drop. Mortgage interest rates followed suit with their own adjustments, with the 30 year fixed rate settling to 6.08% for the week ending September 26.

Just last week, our CEO, Robert Reffkin discussed the state of the national real estate market on CNBC (watch it here). Bottom line, markets are improving across the country.

Locally, the year-to-date sales data for the DC Metro area through August shows average sales price up 6% year over year ($506,219 from $476,804) with an average of 27 days on market (down 3.5% year-over-year). Inventory levels remain tight with two month’s supply of inventory in our area, but that number is tracking up and is currently the highest it’s been since January 2020. Since Labor Day, we’ve seen particularly high demand in homes priced under $2m, with many homes receiving multiple offers.

Looking ahead, we think the lower rates will continue to drive activity well into October, but do expect things to quiet down as we approach Halloween and the elections in November. If this year follows normal presidential election cycles, we expect a big boost in activity come early 2025, turbo-charged by falling rates and the erosion of the lock-in effect which has dampened supply for the last few years.