The inventory of homes for sale is up within our D.C. Metro region, yet many buyers have not been taking advantage of the increased options of available homes because they are waiting for interest rates to drop. But apparently some buyers, particularly millennials, are getting tired of waiting and may soon enter the market, according to a recent Realtor.com survey.
“Nearly 1 in 4 millennial respondents indicated that they plan to buy a home in the next six months, up from just 15% in September 2024. Just 14% of all respondents plan to do the same,” reports Realtor.com.
These buyers are indeed wise to get in the game now where they can take advantage of reduced competition and price reductions. “During the week ending May 25, 9.2% of all active listings in the greater D.C. region experienced a price drop, compared to just 7.3% a year ago,” reports Bright MLS in its weekly market report [Dated May 27, accessed June 2, 2025). And price reductions are becoming more common as we move into late spring within the “close-in suburbs”, such as Alexandria and Arlington, according to Bright.
It’s worth noting that affordability continues to be an issue for many buyers, and inventory, although it has gone up, is not as extensive as it could be. Like buyers, many sellers also continue to wait as well because they hold low-interest rate mortgages, which they would not have if they sold and then bought a new home. According to the Realtor.com survey, about half of potential sellers feel “locked in” because of this rate situation. So, if rates do eventually drop, there would likely be a considerable bump in market activity, which is related to both more buyers becoming active and more people listing homes.
Interestingly, despite high prices and interest rates, home ownership has gone up in Virginia, according to the Virginia Association of Realtors, and Virginia has the 19th highest home ownership rate in the country (moving up from 24th last year) at 70.5 percent. The homeownership rates vary by region according to VAR:
Across metro areas in the state, smaller markets such as Winchester (73.5%) and Lynchburg (71.9%) had higher owner occupancy levels compared to larger areas like Virginia Beach (63.3% and Northern Virginia (63.5%). At the county level, Powhatan (93.1%) and New Kent County (92.1%) had the highest homeownership rates in the state while Petersburg (38.3%) and Emporia (38.4%) had the lowest rates.
For now, however, many aspiring homeowners may continue to wait. But those buyers who take advantage of a slower than usual spring market and price reductions may be in the best position when rates come down, since all they will need to do is refinance.
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