By mid-October, mortgage rates were about 1% higher than they had been on Labor Day. In September 2024, when rates dipped to 6.08%, pending sales in these same markets rose 14–18%. This September, rates crossed 7% and pending sales fell by almost the same amount. That tells me rates are driving buyer activity more than prices are. A 1% move in rates changes a monthly payment about as much as a 10% change in price.

The Home Team Just Won

The biggest change from this election may have nothing to do with economics. It’s the mood.

DC real estate has struggled for most of the past three to four years. The work-from-home era started it, and federal workforce cuts, return-to-office fights, condos listed below their late-2010s prices and constant headlines about the city emptying out made it worse. The economics were part of it, but psychology played a bigger role than most people realize.

Think about a sports team that’s been losing for four years. The stadium empties. Nobody wears the gear, nobody hosts the watch party, and half the city stops checking the score. Then the team strings together a few wins, and suddenly everyone’s a fan again. The jerseys come out, the parking lot fills up, and ticket prices start rising.

DC has been the losing team since 2022, and the stadium has been half full for four years. A lot of the fans who left did so because of the mood, not just the math. They lost faith that what started in the 2010s would continue. For many people who live here, this election felt like their team winning the Super Bowl, and I expect that energy to show up in local housing. I made that call on X a week before the election, and I wrote about it again the morning after the results came in.

I’m already seeing it. On Friday, I took three calls about DC offers that buyers had written opportunistically between Saturday and Monday, right before the election. The sellers didn’t respond quickly, and in each case other offers have now come in. Energy can change fast.

What the Election Changed for Rates

Democrats won control of both the House and the Senate, so we now have divided government. The bond market has been asking for smaller deficits, and divided government has usually slowed federal spending no matter which party holds which branch. Some investors also think the result will cool the data center buildout and the heavy borrowing behind it, which has been pushing yields higher. If Congress has more say over war funding, it could also push toward a quicker resolution in Iran and lower oil prices. None of this is guaranteed, but all of it points toward lower mortgage rates as we move through 2027.

Rates were already improving before Election Day. Mortgage News Daily’s average 30-year fixed rate was 7.17% on November 5, down from 7.30% on November 3. As of Friday, November 6th, I have been quoting a few 30-year fixed rates in the high-6s, and adjustable rates in the low-to-mid 6% range.

That combination is what I’m watching. A better mood brings buyers back into the stadium, and even a slight improvement in rates gives them the room to act.

There is a risk on the other side. Stocks rallied on November 4th and then sold off on November 5th, much like they did in 2018. Rising stock prices have supported housing over the last few years. If that weakness continues, the lost wealth could become a headwind.

Where the DMV Housing Market Stands Now

For buyers and sellers have been playing a game of chicken and that has kept the DMV housing market frozen. Many buyers tell me they are waiting for sellers to cut their prices. Some sellers tell me they would accept 10–15% less, but they don’t want to lower the list price because their competition hasn’t. Neither side wants to guess where the bottom is, and that has kept the market frozen.

For sellers have started competing again. I’m seeing seller-paid closing costs, temporary and permanent buydowns, and “flex credits” that the buyer can use toward the price, closing costs or a lower rate. These incentives show up when markets are slow, and they can make a real difference to both the cash a buyer needs and the monthly payment.

The market is also split. About half of buyers have a real affordability problem. The other half aren’t stretched at all, and many of them are the ones waiting on the sidelines. Earlier this year, my company had more conversations with buyers who were ready, willing and able to buy than in 2023, 2024 and 2025 combined. Those buyers are still out there, waiting for a reason to act.

By area, here is how I see it: