Insights
Market reports, forecast data, industry insights, and more from iEmergent.
For this month’s mortgage market analysis we’re focusing on the heart of the nation. The city that shapes the housing market offers a blend of history, politics and vibrant neighborhoods. As we look ahead to 2025, let’s explore where mortgage opportunities will be and which borrowers are poised to benefit. How will the market evolve, and what can lenders do to make the most of the forecasted growth?
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The Washington-Arlington-Alexandria, DC-VA-MD-WV core-based statistical area (hereafter referred to as the Washington, DC, market) is home to over 2.3 million households, and has an overall homeownership rate of 63.9%. What can lenders and real estate professionals expect in terms of mortgage activity next year? We’re forecasting nearly 70,000 purchase loan originations in 2025. With an average loan size of over $575,000 — among the highest of any U.S. city — that amounts to more than $40 billion in purchase loan volume for the year.
Mapping this forecast at the census tract level shows an uneven distribution of purchase dollars with heavy concentrations on the city’s affluent west side:
The Washington, DC, market is projected to experience significant growth in the next five years. Using iEmergent’s Mortgage Velocity Index (MVI), we see that the DC market is expected to grow faster than the overall U.S. market—an MVI of 1.68 signals faster-than-average growth, creating numerous opportunities for lenders to tap into.
In fact, when compared to other markets we have studied recently, DC outpaces all but Las Vegas for projected growth:
Washington, DC, is also a prime market for diverse lending, particularly for Black and Hispanic households, where the homeownership gap remains significant. The current homeownership rates are as follows:
The disparity between the overall homeownership rate and the rates for Black and Hispanic households highlights an important opportunity for lenders to target underserved populations. From 2023 to 2026, 44% of the forecasted growth in purchase dollars—an estimated $4.8 billion—will be directed to diverse borrowers. By isolating these demographic segments before mapping the purchase origination forecast at the census-tract level, we can identify hot spots of diverse lending opportunity around the CBSA:
By leveraging this kind of granular data, lenders can develop strategies to reach these underserved borrowers. Possible initiatives include:
Another growth area in the Washington, DC, market is loans to low-to-moderate-income (LMI) borrowers. From 2023 to 2026, over $2.2 billion in new LMI loans are expected in the region. These loans will be distributed across LMI and non-LMI census tracts:
LMI Census Tracts
Imagine what you could achieve with access to this kind of data—and much more—for your market. Using forward-looking insights, you can craft strategies to grow your loan portfolio, expand market share and build more inclusive lending programs. iEmergent’s Mortgage MarketSmart platform empowers lenders to access market intelligence that informs their decisions, giving them a competitive edge.
Ready to see how this data can work for you? Schedule a Demo
All maps and data in this email are from iEmergent’s proprietary forecasts and Mortgage MarketSmart’s suite of market intelligence tools.
*Generally accepted minimum accuracy standards for predictive analytics: 70%.