Real Estate Market Update: March 2025

Things are starting to heat up as we head into the spring!

Mortgage rates are slowly inching down, and more inventory and choices have helped ease some pent-up demand. However, market conditions vary widely depending on the region, with the Northeast seeing above-average price growth and a shortage of available homes continuing to limit buyer options and drive competition.

Want the latest real estate news? Here’s the housing market update for March 2025!

March Housing Market Trends

More buyers are jumping into the market, but it’s going to be a bumpy ride due to affordability concerns and limited inventory.

Existing Homes

Between February 2023 and February 2024, the median existing-home sales price increased by 3.8% to $398,400, according to the National Association of Realtors (NAR). Sales also climbed by 4.2% that month, but fell 1.2% from a year ago.

NAR chief economist Lawrence Yun pointed out that buyers are slowly entering the market. Mortgage rates haven’t changed much, but the increase in inventory just in time for the spring real estate market has released some pent-up demand.

New Construction Homes

The median new home sale price decreased by 1.5% in February from a year ago to $414,500, the National Association of Home Builders (NAHB) reported. The pace of new home sales was up 5.1% compared to a year earlier.

New home sales have largely been flat in 2025, although the ongoing limited inventory of existing homes has continued to support the need for new homes, said Buddy Hughes, chairman of the NAHB. 

Housing Inventory

February saw a continued rise in inventory for existing and new homes.

The inventory of unsold existing homes was up 5.1% at the end of February compared to the previous month, NAR reported. This is the equivalent of a 3.5 months’ supply at the current monthly sales price.

The NAHB reported that new single-family home inventory was up 7.5% year-over-year, representing an 8.9 months’ supply at the current building pace. 

Completed, ready-to-occupy homes for sale also increased by 35% from a year ago. This is the highest count since mid-2009!

Mortgage Rates

Mortgage rates are stable but slowly coming down. Purchase applications also saw the strongest weekly pace in nearly two months and were 7% higher than a year ago, according to the Mortgage Bankers Association (MBA).

According to Freddie Mac’s Primary Mortgage Market Survey, the 20-year fixed-rate mortgage was 6.65% as of March 27, 2025. Freddie Mac pointed out that recent mortgage rate stability will benefit homebuyers this spring, which we can already see with the recent uptick in purchase application activity.

DC Housing Market Update

The Northern Virginia and D.C. housing markets have remained steady in February, with signs of rising inventory and continued buyer interest as we head into the busy spring real estate market.

According to the Northern Virginia Association of Realtors (NVAR):

• Closed sales dropped 8.1% compared to February 2024.

• The median sold price climbed to $732,750, up 6.6% year-over-year.

• Inventory improved, with active listings up 31.8%, offering a 1.12-month supply.

• Homes spent an average of 22 days on the market, the same as last year.

Bright MLS also added that the federal government workforce cuts and back-to-office mandates will likely have an impact on the local housing market. 

More inventory and slower price growth would certainly be welcome, but both buyers and sellers should expect some level of uncertainty in the spring market. Despite the decline in sales, the DMV is still a competitive market!

The Best Week to Sell Your Home in April

The week of April 13-19 is the best time to list your home in 2025, according to Realtor.com. You could get as much as $27,000 more than at the start of the year.

Based on the analysis, that week is expected to have a balance of housing market conditions—pricing, inventory, demand, and market pace—that favor sellers, more than any other week in the year.

Historically, home prices during the week of April 13-19 are 1.1% higher than the average week throughout the year, and typically 6.7% higher than the beginning of the year. 

If 2025 follows last year’s trends, which is likely, then the national median listing price could be as much as $4,8000 above the average week and $27,000 more than the start of the year.

It Could Take 7.5 Years to Close Housing Gap

Housing inventory has been on the rise, but it could take as long as 7.5 years to close the housing gap at the current building pace, according to a new report by the Realtor.com economic research team. Last year, the country was still 3.8 million units short of meeting demand despite increased inventory.

It also varies by region. The report claimed that if 2024 trends were to continue, the South would be able to close the housing gap in three years (thanks to the faster pace of new home construction), the West would take 6.5 years, the Midwest would take 41 years, and the Northeast would see no improvement.

The key to closing this gap is speeding up the new home construction process. However, President Trump’s tariffs on Canada, which supplies most of the lumber used in residential construction, could significantly slow down construction.

Final Thoughts

Will buyers catch a break this spring selling season? Probably not, but conditions are improving.

Inventory is rising, and mortgage rates—while still elevated—are inching down. That’s bringing more buyers off the sidelines, even as affordability remains a challenge in many areas.

While new construction is helping ease the pressure, we’re still years away from closing the housing gap. Regional differences are growing more noticeable, with places like the South seeing faster progress than the Northeast.

Heading into the busiest season of the year, both buyers and sellers should expect a competitive market with pockets of opportunity. If mortgage rates hold steady and inventory continues to climb, we could see more balance, but volatility isn’t off the table.

Looking to buy or sell in the DC area? Don’t navigate the complexities of the current housing market alone! Reach out today for expert real estate leadership.