No, the DC Housing Market Is Not Crashing Because of “Trump Cuts”

In recent weeks, social media platforms have been abuzz with posts suggesting a massive influx of homes entering the market in the Washington, D.C., area, purportedly due to federal worker layoffs initiated by President Donald Trump and Elon Musk. These posts, featuring images of numerous new listings in regions like Arlington County and Falls Church, Virginia, imply a direct correlation between federal workforce reductions and a sudden real estate sell-off in Northern Virginia.

However, real estate experts have debunked these claims, confirming that the viral images are fabricated. Lawrence Yun, Chief Economist for the National Association of Realtors, stated, “Right now, we are not seeing any major increase in inventory or any plunging in home prices.”

Similarly, Ashleigh Wehmeyer, a real estate agent with Compass Realty, noted that professionals are actively addressing the misinformation: “Some realtors have been posting because they’ve been getting calls from clients saying, ‘What’s going on? Is this true? Should I put my house on the market right now?'”

Data supports the experts’ assertions. Housing inventory statistics for the first half of February indicate minimal changes in most Northern Virginia cities and counties compared to the same period last year. The most significant increase was observed in Loudoun County, which experienced a 24% rise in new home listings—a figure attributed to new constructions and some residents relocating closer to their workplaces due to return-to-office mandates.

It’s essential to recognize that direct federal government employees constitute only about 9% of the region’s workforce. As Lawrence Yun highlighted, “Ninety percent work in the private sector, many are government contract related, but nonetheless, given the highly educated workforce in the D.C. region, many companies want to tap the workforce.”

This diversified employment base contributes to the housing market’s resilience, even amidst federal employment fluctuations.

While federal workforce reductions have raised concerns, the current real estate data and expert insights indicate that the D.C. housing market remains stable. Homeowners are advised against making hasty decisions based on misleading online information. For those affected by federal cuts, resources such as the Fairfax County Economic Development Authority’s free webinars are available to provide guidance and support.

Read more: Fannie Mae’s economic forecast for 2025

Franklin Carroll

Franklin Carroll is Kukun's VP of Modelling and Analytics; After finishing his studies at the University of Chicago, he worked at Fannie Mae where he helped build Collateral Underwriter, roll out the Value Verify initiative, and specialized in collateral related and credit related policy.

Published February 20, 2025