The Washington, D.C. housing market is showing signs of weakness, primarily driven by mass layoffs of federal workers ordered by Elon Musk’s Department of Government Efficiency (DOGE). According to Realtor.com data, the area is experiencing a notable increase in homes for sale, signaling potential disruptions in the market.
Since the beginning of 2025, thousands of federal employees have been laid off or voluntarily resigned under the “Fork in the Road” buyout program. As a result, the Washington, D.C. housing market has seen a 56.2% year-over-year increase in homes for sale by the week ending March 8, continuing a trend of rising inventory over the past several weeks.
Washington, D.C. is home to 11% of the U.S. federal workforce, making it especially vulnerable to these changes. Experts suggest that the layoffs will reduce demand for housing while simultaneously increasing supply as affected workers attempt to sell their properties.
The trend of rising inventory began in January, with a 35.9% increase in listings compared to the previous year, followed by a 41% rise in February. Other U.S. metros with significant federal employee populations, such as Virginia Beach, Oklahoma City, and San Diego, are also seeing increases in housing inventory, though the numbers are less pronounced than in D.C.
Realtor.com’s Chief Economist, Danielle Hale, noted that the impact of federal layoffs has likely caused some homebuyers to pause their searches, both due to job insecurity and concerns about future market conditions. While inventory is rising, asking prices are slightly lower, and the market situation continues to evolve.
Hale also indicated that the effects of the layoffs in D.C. may spread to other areas with large federal workforces. “While D.C. has the largest share of federal employees, other regions with a high concentration of federal workers could see similar shifts in the coming months,” she explained. As the situation unfolds, some workers may stay in the area, but others might relocate, contributing to further market changes.
