2025 Housing Market Recap: What Trends Defined DC, Maryland & Virginia

Introduction

The 2025 housing market across the D.C., Maryland, and Virginia (DMV) region painted a picture of resilience amid cooling national trends. While rising interest rates and affordability concerns tempered buyer activity, the region’s strong economy, limited inventory, and steady migration kept prices stable — and in some areas, still climbing.

In this post, we’ll break down what shaped the DMV market in 2025, highlight local differences across DC, Maryland, and Virginia, and share insights for homebuyers and sellers heading into 2026.

1. Price Growth Slowed but Stayed Positive Across the Region

• Washington, DC: Median sold price around $640,000, up ~2.4% year-over-year. (Foxes Sell Faster, 2025)

• Maryland: Median home price $450,000, up ~3.3% year-over-year. (Maryland REALTORS® June Report)

• Virginia (Northern VA): Median sold price near $670,000, up about 3–4%, driven by Fairfax, Arlington, and Loudoun counties. (Bright MLS 2025 Snapshot)

📊 Takeaway:
Home prices across the DMV continued to inch upward — not the explosive growth of 2021–2022, but steady and sustainable. This stability shows that the region’s fundamentals (strong job base, limited land, and high desirability) are still in play.

2. Inventory Eased Slightly — but Supply Remains Tight

• Maryland: New listings dropped 18% year-over-year, keeping competition strong for well-priced homes.

• Northern Virginia: Active listings increased modestly (~4%), giving buyers a bit more room to negotiate, but total supply is still below pre-pandemic levels.

• DC: Slight uptick in listings, but the market remains competitive, especially inside the Beltway.

📉 Takeaway:
Inventory is improving slowly, but it’s still a seller-favored market overall. Well-priced homes sell faster; overpriced or poorly staged listings linger longer.

3. More Balanced Negotiations & Price Adjustments

• About 28% of DC listings saw price cuts in 2025 — up from 20% the year prior.

• In Maryland and Virginia, price reductions occurred in over 40% of listings, suggesting more flexibility for buyers.

• Average days on market stretched to ~35–40 days in many DMV submarkets.

🤝 Takeaway:
The power dynamic is shifting slightly toward buyers. Sellers still have leverage, but gone are the days of bidding wars on every property. Negotiation strategy now matters more than ever.

4. Buyer Behavior: Cautious, but Ready When the Right Home Appears

• Mortgage rates remained in the 6.5–7% range most of the year, keeping some buyers on the sidelines.

• Despite that, pending sales in Maryland and Virginia rose modestly in late 2025 — a sign that pent-up demand is waiting for rate relief.

• First-time buyers and move-up buyers are especially active in the $400K–$700K range across Prince George’s, Montgomery, and Fairfax counties.

🔑 Takeaway:
Buyers are choosier but serious. They’re looking for turnkey homes, fair pricing, and clear value.

5. Policy & Local Market Factors to Watch

• Montgomery County’s “Missing Middle” housing law (passed 2025) may increase smaller multi-unit builds, expanding affordability options.

• Virginia continues to attract relocation buyers from DC seeking more space and favorable taxes. Loudoun and Prince William counties lead in new construction.

• DC zoning changes under review may modestly boost accessory dwelling units (ADUs) and multi-family conversions in 2026.

🏗️ Takeaway:
Local policy changes are quietly reshaping the housing mix. Expect gradual growth in supply over the next few years — but it won’t be enough to cause price drops across the DMV.

6. Forecast for 2026

Here’s what to expect moving forward:

Final Thoughts

2025 proved the DMV real estate market is resilient, adaptable, and still moving forward.
For sellers, strategic pricing and presentation are key. For buyers, patience and preparation pay off — as more homes hit the market in 2026, opportunities will expand.