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Realtor calls DC housing market 'dysfunctional' with higher interest rates and lower supply

With fewer people motivated to sell, he says it's hard to predict when buyers might see relief.

WASHINGTON — Between high interest rates and low supply, buying a home in the DMV right now is tough. The Greater Capital Area Association of Realtors (GCAAR) offers a snapshot of where the market stands heading into the fall.

Data from July shows interest rates still sitting at +7% coupled with historically low inventory.

“That combination is somewhat unprecedented," President of the GCAAR, Avi Adler said. "And it's led to -- not to use the word loosely -- but dysfunctional housing market."

Spotlighting the D.C. market, their July data shows that the median sold price increased by 3.7% from June to $625,000. Meanwhile the District saw 12% fewer listings.

“You've got, you know, a good number of sellers that I believe are looking to sell their homes, but feeling handcuffed to their current mortgage rate," Adler said.

Adler advises first time homebuyers to research the neighborhood they want to live in and develop a plan with their realtor.

“There still is competition, but you know, maybe not the crazy competition you had a year or two ago," he said. "Then, look within another, you know, six months or a year. And if I had my crystal ball say, hopefully sooner, we have lower interest rates, and then to be able to refinance and get your mortgage payment out to, you know where you hoped it would be in the first place.”

Without that crystal ball, it's hard to predict where the housing market will go, but Adler said those interest rates will likely need to come down a bit before supply will rebound.

D.C. offers financial assistance for homebuyers, but a few months ago the District ran out of that money for this season.

Online, the Department of Housing and Community Development, says funds are expected to come back online around Oct. 1.

For more information on the D.C. and Montgomery County housing market, you can view the GCAAR's stats here.

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