T
he Washington, D.C. metropolitan area is experiencing a surge in available homes for sale as the spring buying season gains momentum. According to Realtor.com, new listings in the region skyrocketed 56% last week compared to the same period last year, outpacing the national increase of 28%.

    This uptick follows significant gains earlier this year, with inventory rising 35.9% in January and 41% in February. The surge is attributed to a combination of fresh listings, which increased by 24% last week, and a slowdown in buyer activity.

    New construction, particularly condos and townhomes built over recent years, is contributing to the market's swelling. Mortgage rates have eased nationwide, dropping from 7.25% in mid-January to 6.82%, which may be helping to boost inventory across the country.

    However, the D.C. area's spike stands out, with new listings this year already running 11.9% ahead of last year but still 12.8% shy of 2022 levels. Experts believe federal layoffs and budget cuts are slowing down homebuyers, causing some to pause their searches due to job concerns.

    Realtor.com's chief economist, Danielle Hale, attributes the trend to the adjustment period following federal layoffs and funding cuts. "The data hints at challenges faced by those whose jobs have been directly impacted or who may be concerned about what's ahead," she notes.

    As a result of the increased supply, prices in the D.C. area are beginning to slip. The median list price dropped 1.6% year-over-year last week, outpacing the national dip of 0.2%. Nationally, the per-square-foot price ticked up 1.2%, suggesting more modest homes are entering the market.

    Hale warns that while some households may choose to stay in the area and find new job opportunities, others may opt to leave or retire elsewhere. The implications for highly federally employed markets could be significant in the coming weeks or months.