After years of bidding wars, rapid price growth, and limited inventory, the DMV housing market is entering what many economists are calling a reset year in 2026. This isn’t a crash — and it’s not a return to pandemic-era frenzy — but a long-awaited rebalancing that rewards buyers and sellers who move with intention and strategy.
📉 Prices: A Rare Pause, Not a Decline
According to Bright MLS economist Lisa Sturtevant, the median home price across the DMV is projected to dip slightly — from $623,140 in 2025 to $616,700 in 2026, a modest 1% decline. That makes the DMV the only mid-Atlantic market where prices are expected to soften next year.
This adjustment reflects a market catching its breath after years of rapid growth and an unusual inventory spike — partly driven by federal workers leaving the region. As Sturtevant notes, “This will be a reset year, not a rebound year.”
💰 Mortgage Rates: Small Shifts, Big Impact
Interest rates remain the biggest driver of buyer behavior. Bright MLS projects rates falling to around 6.15% by the end of 2026, down from about 6.25% in 2025. Nationally, economist Jeff Tucker of Windermere expects rates to remain below 6.25% and potentially dip under 6%.
That difference matters. On a $650,000 home, a rate drop from 6.5% to 6.0% can save buyers roughly $200 per month, easing affordability in a region where housing costs already stretch budgets.
🏠 Inventory: More Options, Still Not “Normal”
Inventory is projected to rise about 14% region-wide in 2026 as homes sit on the market longer. In DC proper, inventory jumped more than 44% from 2024 to 2025, with especially sharp increases in exurban areas affected by return-to-office policies.
Even so, the DMV remains well below pre-pandemic inventory levels. Buyers will have more choice — but not an oversupply.
📊 Sales: A Gradual Thaw
After two slow years, Bright MLS forecasts a 7.8% increase in regional home sales in 2026. Nationally, some projections suggest growth as high as 14%, though the DMV’s pace will remain more measured due to federal employment uncertainty.
Still, nearly 8% growth signals meaningful momentum returning to the market.
📍 How the Submarkets Are Diverging
Washington, DC
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Prices expected to rise 2.5%–3.5%, with medians reaching up to ~$651,000
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Strong demand in Brookland, Columbia Heights, and Petworth
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Rental vacancy remains tight (around 3.1%–3.4%), supporting investor interest in areas like Navy Yard and H Street Corridor
Maryland
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Projected appreciation of 2%–4%, anchored by federal employment and biotech growth
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Strong demand in Montgomery, Prince George’s, and Anne Arundel Counties
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Over 150,000 federal employees and a top-five national biotech cluster continue to stabilize the market
Northern Virginia
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Single-family prices expected to rise 1.9%
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Inventory forecasted to increase nearly 36%, improving balance
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Arlington remains especially resilient, with median prices near $787,000, bolstered by walkability and Amazon HQ2
As Northern Virginia Association of Realtors CEO Ryan McLaughlin notes, “Northern Virginia remains a desirable place to live, work, and invest.”
🧭 What This Means for Buyers
2026 may offer the most favorable buyer conditions in years:
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More inventory
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Fewer bidding wars
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Longer decision timelines
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Slightly improved affordability
The frenzy of 2021–2022 is firmly behind us. Buyers should focus on being prepared, realistic about condition, and hyper-local in strategy — because not every zip code will behave the same.
🏡 What This Means for Sellers
Sellers are still in a strong position, but success will require:
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Accurate pricing from day one
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Strong presentation and maintenance
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Strategic timing, especially if spring 2026 brings renewed activity
Well-located, move-in-ready homes will still sell. Homes needing work should expect tougher negotiations and longer timelines.
🔑 The Bottom Line
2026 represents a return to normalization — what some analysts call “The Great Housing Reset.” With incomes projected to grow faster than home prices and inflation stabilizing, affordability is finally improving on a relative basis.
The winners in 2026 will be those who:
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Understand their specific submarket
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Set realistic expectations
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Work with experienced, data-driven professionals
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Act decisively — without panic
For buyers, sellers, and investors alike, this is a market that rewards preparation over urgency — and strategy over speculation.
Sources: Bright MLS, Northern Virginia Association of Realtors, Redfin, Realtor.com, and independent analysis by economists Lisa Sturtevant and Jeff Tucker
