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DC rents end streak of declines
After three months of declines, February marked a turnaround with an annual rent-price increase for the D.C. housing market. Average rents in January fell 2.3% after previous declines of 4.2% and 3.4% in December and November, respectively. According to Redfin, this trend was part of a broader decline in 2024.
“Asking rents have fallen nine of the past 12 months in the District, even as the wider Washington D.C. metro area saw some of the biggest rises in the country,” Redfin said in its report.
Despite recent drops, last month’s increase pushed the average rent price to $2,325 — only slightly below its peak of $2,463 in July 2023. February’s price still falls within the normalized range of $2,265 to $2,350 seen in 2024, which Redfin attributes to an apartment construction boom. Still, D.C.’s average rent remains well above the national median of $1,599.
While the district saw modest price growth, the Greater D.C. metro area took on sharper rent hikes. Redfin data showed a 9.2% yearly increase in February. That follows closely behind prior jumps in January (+8.5%), December (+8.2%) and November (+9%).
Economic pressures, housing supply issues
Soaring rent prices come as job cuts and return-to-office mandates remold D.C.’s job market. But Redfin senior economist Sheharyar Bokhari noted that it may be too early to link rising rents with employment changes.
“The District is always in transition, especially when a new administration takes office, with people moving in and out of the city for both government and private sector work opportunities,” Bokhari said. “Rents will be impacted if laid-off workers move away in droves, but also by workers who want to live closer to where they work, now that they are required to be in the office.”
A slowdown in apartment construction is also fueling rising rents. Bokhari pointed out that in 2024, D.C. approved only two apartment units per 1,000 people. For reference, that’s down from four per 1,000 in 2023.
Tariffs, construction costs could raise rents
Analysts believe higher construction costs could drive rents even further. A CoreLogic analysis suggests that tariffs could increase construction costs by 4% to 6% over the next year as expenses for building materials could rise by double-digit percentages.
With the new Trump administration pushing out market-changing policies, that could be a reality. Imports from China now face a 20% tariff, while other goods from Canada and Mexico will be subjected to a 25% tariff. Both countries that border the U.S. supply softwood lumber and gypsum — two key materials for domestic construction.
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