May 2022 Market Report
Despite Fewer Sales, Housing Market Remains Competitive
Compared to last year’s frenzied pace, home sales activity in the Washington metro area has decelerated. In May 2022, there were 6,807 home sales regionwide, which is down 11.6% compared to May 2021. A lack of inventory, along with affordability challenges and rising mortgage rates, have created headwinds in the market.
Despite fewer sales, home prices continue to rise briskly across the region. At $605,000, the median price was up 8.0% compared to a year ago and is now nearly $160,000 higher than it was five years ago.
Local Markets
Home sales have slowed in most markets, though strong competitive remains in some local communities. Regional sales were down 11.6% year-over-year, but home sales were flat and new pending sales increased in May in the city of Falls Church. Buyer activity has remained somewhat stronger in the other close-in suburbs of Alexandria City, Arlington County, and Prince George’s County.
Even as the number of sales declined, buyers in the market continue to push prices up. The fastest price growth was in Falls Church City, where the May median home price of $1.0 million was up 20.9% compared to a year ago. Price growth was also particularly strong in Alexandria City and Loudoun County in VA and Montgomery County, MD.
Inventory is still low but there are signs that supply may have bottomed out in some local markets. Active listings were up year-over-year in Fairfax City and Loudoun County in VA, along with Prince George’s County, MD and Washington, DC
Market Outlook
Despite record home prices and rising mortgage rates, the Washington housing market has remained competitive. However, the deceleration in buyer activity suggests that economic headwinds are drawing some prospective buyers out of the market. Inventory is still low, although in some local markets supply may have bottomed out. In the months to come, expect housing market activity to be slower than the frenzied pace of last year. Home prices in the Washington area will continue to rise, but price increases will be lower than they have been over the past two years.
