President Donald Trump has shifted federal economic policy in a big way since his inauguration on Jan. 20. Housing markets across the country will no doubt be impacted in some way, but one city is a special case — Washington, D.C.
That’s because the Trump administration made reductions to the federal workforce a priority, resulting in an unknown number of civil servants who’ve lost their jobs.
s this changing the housing market in the nation’s capital? Altos data suggests the dynamic in Washington has shifted since the beginning of Trump’s second term.
As things stand, housing supply in Washington is rising rapidly. After years of stagnant inventory, the weekly average of homes for sale is up 34.8% year over year, while new listings have spiked by 9.3% on a 90-day rolling basis.
New listings rise every spring, but the sharp uptick is notable because in the last week of February, they were down 10.9% year over year. For it to swing from decisively negative to decisively positive in such a short period of time — and over a 90-day average — indicates a significant increase in new listings relative to last year.
But having additional options is not yet enticing buyers to jump into the market at the same pace that inventory is rising. Pending new sales on a 90-day rolling basis have been negative on an annualized basis since February after a strong finish to 2024.
Sellers have responded by reducing prices. For years, the share of listings that received a price reduction in D.C. has been 20 to 25 points higher than the share with a price increase, but this year-over-year trend has shifted.
During the fall of 2024, the yearly gain for listings with price increases was above 50%. It’s now down by 23.7%. The inverse happened with the percentage of listings that had a price cut. In October, that share bottomed out down 14.5%, but it’s now up by 17.1%.
Is this a sign that federal layoffs are undercutting Washington’s housing market? There’s important context to consider when answering this question, and it’s important to not equate correlation with causation.
First, rising new listings and inventory are a seasonal trend, and even the sharp rise is a dynamic that’s currently present in many markets across the country. Sales are increasing as well, just not at the same pace as 2024.
Second, it’s hard to know how many people have been affected because the current status of any given federal agency is seemingly always in flux, with workers being laid off one day and told come back to work the next. Whether layoffs have happened in numbers that could swing the market is unknown.
Third, there are other actions by the Trump administration that might prompt sellers to list quickly and buyers to hit pause. This include Trump’s dramatic new tariff regime, the stock market crash that followed, and the widely held expectation that tariffs will cause inflation to spike.
Fourth, mortgage rates have shot up to 7% as a result of the tariff announcement and the president’s remarks about replacing Federal Reserve Chair Jerome Powell. Homebuyers are very sensitive to rates rising by so much in a short time frame. That may be holding buyers back more than the federal layoffs.
What’s different this time with supply is simply the degree to which it has grown.
Since the last week of February, inventory is up in Washington, D.C., by 42%. During the same period last year, it was up 22%. New listings are up 81% since the last week of February, compared to 54% growth during the same period in 2024.
Conversely, new pending home sales have risen by 43.4% since the last week of February, a decline from the 48.9% figure in 2024.
Because so much has changed so quickly, it will likely be well into the summer before the data shows any impact from new federal policy and the reduction in the federal workforce.
But thus far, the housing market in D.C. is experiencing a rise in supply at a pace that is not yet being matched by demand.
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