Real Estate Market Update: September 2026

Higher mortgage rates put the brakes on the housing market in August, even as homebuyers had more homes to choose from.

Here in the DMV, buyers are also taking their time. Northern Virginia closed sales fell, yet inventory, especially condo and attached home inventory, continues to build.

Here's what you need to know from the August 2026 housing market.

September Housing Market Trends

Home sales are down, and mortgage rates are up, but the job market and economy remain healthy and strong.

Existing Homes

Existing home sales dipped in August by 2% month over month and by 1.2% year over year, according to the National Association of Realtors (NAR). NAR chief economist Lawrence Yun explained that the drop in home sales isn't surprising after the recent spike in mortgage rates. 

Homebuying demand remains strong, as shown by rising home prices. About 643,000 new jobs were added since the start of the year, and wages grew by 3.1% in August, both of which typically drive housing demand.

NAR reported that the median existing home price was $429,100, up 1.6% from a year ago.

New Construction Homes

New home sales were better off in August than existing homes. However, the broader new-home market remains weak, according to the National Association of Home Builders (NAHB).

Affordability remains a problem, and sales are down year over year. Buyers can still take advantage of builder incentives and pricing adjustments. The median new home price was $393,700 in August. This was up 0.4% from July, but down 5.8% from last year.

Housing Inventory

Total housing inventory was up 3.2% from July and up 5.9% from August 2025, NAR reported. It was also the first time since November 2019 that inventory was over 1.6 million units. There’s currently a 4.9-month supply of unsold inventory.

In new construction, NAHB reported new single-family home inventory to be 8.5 months at the current building pace. This is a 2% drop from last year. Combined resale and new home inventory was 5.3 months.

Mortgage Rates

As of September 24, 2026, the average interest rate on a 30-year fixed-rate mortgage was 7.03%, Freddie Mac’s Primary Mortgage Market Survey reported. This is the first time since January 2025 that rates passed 7%.

Despite the higher rate, Freddie Mac noted that the housing market remains supported by a strong labor market and an economy that’s growing at a healthy rate.

DMV Housing Market Update

Similar to July, condo and attached home sales drove much of the increase in available inventory in August, the Northern Virginia Association of Realtors (NVAR) reported. However, a decline in sales indicates buyers are not moving at the same pace as last year.

Closed sales in August dropped 8% compared to a year ago. Detached listings fell 8.5% over the last year, while attached inventory increased by 39.7%. Condo inventory is up by 44.8%, and townhome inventory jumped by 29.9%

Buyers have more options, but many are choosing not to act. According to NVAR, several factors have led to lower sales, including affordability, financing costs, and personal circumstances.

The median sold price was $765,000, up 2% from last year, and homes spent an average of 26 days on the market. The months' supply rose to 2.08, up 14.7% from August 2025.

In the greater Washington, D.C., metro area, prospective homebuyers are also holding back, Bright MLS reported. The multiple listing service expects a slow fall market with fewer buyers and sellers, slower price growth, and homes generally taking longer to sell.

Bitcoin Can Now Fund Your Down Payment

Selling bitcoin has always been an option to fund a home purchase, but now buyers can pledge bitcoin toward a home purchase without selling it first.

Better Mortgage and Coinbase recently partnered to offer a mortgage product that allows qualifying borrowers to pledge bitcoin toward a home purchase, CoinDesk reported. 

Better originates the conventional loan, which must adhere to Fannie Mae guidelines. It also originates a separate loan that funds some or all of the down payment and is secured by the pledged bitcoin. It also puts a second lien on the property.

The loan begins at a 250% collateral ratio, or a $2.50 bitcoin pledge for each $1 borrowed. According to Better, a buyer purchasing a $500,000 home could pledge $250,000 worth of bitcoin to fund a $100,000 down payment.

Better originates the loans and collects through a combined monthly payment. At closing, the bitcoin transfers from the borrower's Coinbase account into Better’s account.

New Homes Are a Better Value Than Existing Homes

A new home may be a better deal than an existing one.

A new Zillow analysis found that new homes sell for a median of $205 per square foot nationwide, compared to $212 for existing homes. The biggest discounts are typically in areas where construction boomed during the pandemic, mostly in the Sun Belt.

However, new home prices were also better in Washington, D.C., with a median sale price of $268 per square foot versus $290 for existing homes.

The reasons why?

Zillow pointed out that supply could be the primary driver. Higher levels of new home inventory have pushed builders to offer lower prices and incentives like mortgage rate buydowns. There’s also less of a reason for existing home sellers to cut prices.

Final Thoughts

Higher mortgage rates have slowed the housing market, but that doesn’t mean there are no good opportunities!

Inventory has improved and continues to improve nationwide and here in the DMV. There may also be better options in places buyers haven’t looked, like new construction, condos, townhomes, or attached homes.

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