January Highlights:

• JANUARY PRICE FALLS FOR FIRST TIME SINCE 2016
  
  
• Average Price Opens Year DOWN 1.7% vs. Jan 2025
  It's only one month into the year, but it does mark an important variation from past years that should be monitored. The last time the average home price in Northern Virginia opened the year down was ten years ago in January 2016. By comparison, since 2020-25 January prices have opened the year on average up 7.5%. Last year, prices opened up 11% in January and ended the year up 4%. It takes about three months of data to get a sense of the probable trend for the year. Generally, inventory remains seller-advantaged at 1.04 months in January, but is up 23% from January 2025. The increase in inventory is reflected in three important market metrics all tracking significant buyer-friendly variances from January 2025 as was the case for most of last year - Active Listings (UP 23%), Days on Market (UP 33%), and Sold-to-List Price Ratio (DOWN 130bp).
  
  
• Buyer Showings UP 2% in January 2026
  Buyer showings (demand) are up slightly in January 2026 over January 2025 (2%). However, this is despite a significant decline in showings during the recent snow/ice storm. Before the storm, showings during the first few weeks of January were pacing about 15% above 2025. 
  
  
• Listings UP 85% from December to January
  The seasonal spike in New Listings (supply) from December to January occurred as expected. However, this January's UP 85% is outpacing both Jan-2025 (UP 69%) and the typical average UP 54% during the last 6 years.
  
  
• January Listings DOWN 8% vs. 5-year Average
  Seller listings stabilized in 2024, resisting the continued downtrend experienced in recent years. Listings remain down compared to long-term averages (-8%), but have substantially improved in Northern Virginia from down 20 to 40% in recent years. This improvement is primarily because the higher listing years before the pandemic continue to fall out of the 5-year calculation. Northern Virginia saw fewer homes sold in January 2026 (1,357) than in January 2025 (1,429) - DOWN 5%.
  
  
• "Rate Locked Sellers" are UNLOCKING Increasing Inventory
  In the wake of rising interest rates beginning in 2022, sellers largely "stayed in place" in 2023 and 2024. Sellers brought an increasing number of New Listings to the market in 2025 (UP 8%). This trend continued into 2026 with January listings UP 6% over Jan-2025. The typical home seller is now 63 years old, a record high. This compares to age 54 in 2014 and age 45 in 2007.
  
  
• Contract Ratio STEADY at 0.77 (slight shift toward sellers)
  Listings Under Contract represent 44% of the total January listings compared to those available and Active for sale at 56%. This is a slight shift toward sellers from the 40/60 seen in December and is relatively consistent with the 46/54 seen in January 2025. The Contract Ratio continues to be uncharacteristically buyer-advantaged like last year, speaking to the higher inventory. This buyer-advantaged Contract Ratio runs directly to the relatively higher frequency of Seller Price Reductions (30% of currently Active listings). The importance of sellers correctly pricing a home in today's market cannot be overstated. 
  

• Inventory INCREASES 23% vs. January 2025
  Inventory in Northern Virginia moved higher in 2025 and continues to trend into 2026. January inventory was on the lower range at 1.04 months as seasonally experienced, but is UP 23% over January 2025. During most of the seasonal selling period in 2025 inventory traded between 1.76 and 1.91 months, significantly outpacing 2024 by 35 to 60%. Since March 2024, weekly Active Listings have been running markedly higher than the previous year (currently 20% higher - 1,150 listings in the DC Metro area). This presents a relatively more balanced buyer-seller market than experienced in 2020-24 when January inventory ranged from just 0.32 to 0.88 mos.
  
  
• Sold-to-List Price Ratio DOWN with Rising Inventory
  Buyer contract prices averaged 97.7% of Seller Asking in January. This is notably down from the 99.0% experienced in January 2025. The compressing Sold-to-List Price Ratio this year is consistent with the falling Contract Ratios, seller price reductions, rising Inventory, influx of buyer contract contingencies, and the more balanced market seen in 2025 and now into 2026. The contract cancellation rate has generally ranged between 12 and 18%. The current 11% is tracking more seller-advantaged than normal.
  
  
• Speed to Contract is DOWN from 2025
  Speed to contract continues its relatively slower pace with only 32% of the 1,357 homes sold in January transacting in the fastest range (0 to 10 days). This is unchanged from December. By contrast, 50% of sales exceeded 30+ days on market, up from 45% last month. This is a significant difference between now and last year. In January 2025, 43% of homes sold in the fastest range (0 to 10 days), while only 32% in January 2026, down 11 points.

• Fed January Meeting: RATE STEADY at 3.50%
  In line with market expectations, the Fed left its benchmark rate unchanged at the January meeting. Mortgage rates remained largely unchanged as the bond market (which determines mortgage rates) was not anticipating a cut. The next meeting is scheduled for March 18. The futures market is presently pricing a 92% chance of no change in March.
  
  
• Headline Inflation FALLS to 2.4%, FALLS to 0.2% Dec to Jan
  Inflation fell in January to 2.4% year-to-year compared to December (2.7%). Inflation month-to-month slightly improved to 0.2% from December's 0.3%. Both numbers were better than expected. "Core Inflation" fell slightly to 2.5% from last month's 2.6%. Core inflation includes more volatile energy and food prices.
  
  
• Conventional Mortgage Rate STEADY at High 5's
  Mortgage rates are steady at relative lows after trending down for several months. Conforming rates are holding at 5.875% and VA/FHA rates at 5.625%. Rates are trading at a three-year low.