Alexandria-area home prices forecast to rise 5.1% in 2026, more than double national rate
Realtor.com projection adds pressure as city prepares plan to preserve dwindling affordable housing stock
Home prices in the Washington-Arlington-Alexandria metro area are forecast to rise 5.1 percent in 2026, more than double the national rate, adding pressure to a city that has already lost nearly two-thirds of its affordable housing over the past quarter-century.
The projection, released Wednesday in Realtor.com’s annual housing forecast, comes as Alexandria grapples with a 62 percent decline in market-affordable apartments since 2000 and prepares to finalize a 40-strategy plan aimed at stemming further losses.
Nationally, the forecast projects a more modest 2.2 percent price increase, with existing home sales rising 1.7 percent to 4.13 million. But the Washington region is expected to see prices climb faster while sales dip 1.3 percent, a sign that affordability constraints are suppressing transactions even as values rise.
Last year’s Realtor.com forecast predicted Washington-area home prices would rise 5 percent in 2025, paired with a 17 percent surge in sales. The price projection held, but the sales boom never materialized — transactions nationally were essentially flat. This year’s forecast projects prices climbing at nearly the same pace while sales dip slightly, suggesting sustained pressure on buyers even as activity slows.
The forecast arrives at a precarious moment for Alexandria.
The city has shed roughly 11,000 market-affordable apartments since 2000, with an average of more than 400 units converting to market-rate housing each year, according to city housing data. Another 900 subsidized affordable units face expiring affordability commitments by 2040.
A household earning 60 percent of the area median income — roughly $68,880 for a single person — can afford about $1,845 a month in rent. The average one-bedroom in Alexandria costs $2,280, a gap of $435 that forces many working families to pay nearly half their income on housing.
The pressure extends beyond renters. Federal workers, who number at least 13,000 in Alexandria, are still recovering from a 43-day government shutdown that ended last month. City officials reported in November that 40 percent of federal employees dipped into savings during the closure, and housing assistance needs are expected to linger.
City Manager James Parajon told the City Council in November that “the shutdown has had a significant impact on our local businesses, our residents, and the workers.”
Cost of living ranked among residents’ top concerns in surveys conducted for ALX Forward, the city’s first comprehensive economic development plan since 2007. That framework, released last month, also identified high housing costs as a key weakness and flagged outmigration of young professionals as a pressing challenge.
The forecast isn’t all bleak. Mortgage rates are expected to ease to 6.3 percent nationally, and local inventory has grown — active listings in Alexandria jumped 51 percent year-over-year in September. Realtor.com projects the typical mortgage payment share of income will fall below 30 percent nationally for the first time since 2022.
And new affordable units continue to come online. The Alexandria Planning Commission approved 233 affordable apartments Tuesday night, including an 88-unit building in Potomac Yard that requires no city funding after developers donated the land — a deal that saves the city an estimated $11 million.
A separate 145-unit project by Alfred Street Baptist Church in Old Town West will replace 34 existing affordable units, with all apartments reserved for households earning below 60 percent of the area median income.
But the pipeline may not match the pace of loss. The city’s $17.3 million housing budget covers all initiatives — production, preservation, rental assistance, and operations. Washington, D.C., by comparison, deployed $144 million in a single funding round last year to preserve 7,700 units.
The Alexandria Housing Affordability Advisory Committee meets Thursday to review draft recommendations for preserving affordable housing and strengthening tenant protections. Public comments are being accepted through Dec. 30, with a final community meeting scheduled for Feb. 28.
Many of the most significant tenant protections the city is pursuing — including limits on rent increases and just-cause eviction requirements — would require approval from Virginia’s General Assembly, where such measures have historically faced resistance.
Housing Director Helen McIlvaine acknowledged last month that “the coming year is very likely to be a year where we’re continuing to plan and look at how we can marshal resources,” citing federal funding uncertainty.
The city’s preservation plan won’t take effect until fall 2026 at the earliest. In the meantime, Alexandria continues losing an estimated 400 affordable units each year — roughly one housing unit every day.