Certainly, UNCERTAIN Times
Last week, a realtor asked me about the possibility of qualifying furloughed government employees for mortgages in the absence of their paychecks. Fortunately, Fannie and Freddie have granted exceptions for furloughed government employees, allowing us to use their previous income — and, we hope, their imminent income— for qualifying purposes. Despite this good news, I told the realtor that another question to ask would be, “Who is comfortable moving forward with the purchase of a home in the absence of a paycheck?”
I have spoken with several individuals who are furloughed and have put their home-buying plans on hold due to the government shutdown. One woman I spoke with, under contract, decided to withdraw and rent for another year when her wife was furloughed. I have talked to even more clients who, although they have been fortunate to keep their jobs and avoid furlough, have been hesitant to move forward with a purchase because of the uncertainty about the DMV market and the overall economy due to the government shutdown, mass federal layoffs, tariffs, and the federal occupation of DC.
Another realtor I spoke to is trying to find data on a recent trend she’s noticed with her own clients. Her buyers, who are usually an even mix of DC residents looking to buy their first home or upsize and individuals moving to DC from other places, are now entirely DC residents, except one. Similarly, her listings were previously an even mix of individuals looking to sell and then move within the district. Now, all her recent clients who are selling are leaving DC, with half of them relocating to another country altogether. Although the sample size is small, this conversation suggested to me a slowing of in-migration to DC and an increasing out-migration. It is becoming increasingly clear that the government shutdown and other policies implemented by the current administration are affecting the DMV housing market, and the data agree.
Realtor.com’s October 2025 Monthly Housing Market Trends Report found that regions with the highest concentration of federal workers, like DC, Baltimore, and Virginia Beach, are showing signs of a market slowdown. They attribute the 11% decline in buyer searches to a drop in consumer confidence regarding their employment and income. The latest Greater DC Area Weekly Housing Market Update from Bright MLS showed a 17.2% increase in new listings and a 3.3% decrease in new pending contracts on homes compared to this time last year, indicating rising supply and declining demand.
Although this news appears negative overall, it is actually fantastic for potential buyers. Although the Brighter MLS report showed a 4.5% increase in the median house price compared to last year, it attributed this to more single-family homes on the market and fewer lower-priced properties, such as condos. Additionally, the report reflected a 4.4% decrease in median house prices in DC proper.
So, if you have been fortunate enough to maintain employment and can stomach some uncertainty, now is a very strategic time to buy. With supply increasing and demand slowing, the market is becoming less competitive and may be shifting to a buyer’s market. This is especially true for the condo market, so our first-time homebuyers in the condo price range should definitely consider speaking with us about getting prequalified.
