Federal Workers Fired By Elon Musk’s Doge Live In These Cities: Here’s How The Housing Market Is Responding

Chip Somodevilla/Getty Images)

A month into the unbridled cost-cutting campaign led by Elon Musk‘s Department of Government Efficiency, which has left thousands of federal employees jobless, the Washington, DC, housing market remains on solid footing, but experts are warning that might soon change.

Before President Donald Trump took office on Jan. 21 and deputized DOGE to root out waste and fraud, the federal government employed more than 3 million workers, about 20% of whom called the greater Washington, DC, metro area home.

“The health of a local housing market is often tied to the health of the local labor market,” says Realtor.com® Chief Economist Danielle Hale. “Federal workforce reductions could have ripple effects on housing markets with a high concentration of government employees.”

And the impact of DOGE’s crusade against inefficiency is potentially already being felt in the form of spiking jobless numbers in DC.

According to the latest figures from the U.S. Department of Labor released on Thursday, unemployment claims in the capital were up 20% during the week ending on Feb. 22 compared with the previous week.

Since Trump’s inauguration, some 8,730 workers from DC have filed for unemployment insurance. It’s unknown how many of them are federal workers.

What is known, however, is that nationally, 7,612 federal employees sought unemployment insurance in the week ending on Feb. 8, up more than 500 from the week before, according to an update from the Department of Labor. For comparison, during the same period in 2024, 6,819 federal workers applied for unemployment insurance.

This map shows that Washington, DC, and Virginia Beach, VA, have the largest shares of federal workers in the U.S.

(Realtor.com)

Overall, applications for jobless benefits across all sectors rose by 22,000 to a three-month high of 242,000 last week but remained within the same healthy range of the past three years, according to the Associated Press.

3 cities with the most federal workers

Among the 50 largest metro areas, the nation’s capital and nearby Virginia Beach, VA, stand out for their high shares of federal employees, at 11% and 7%, respectively. A further 4.2% of the federal workforce live in Oklahoma City, OK, according to the Realtor.com February 2025 Monthly Housing Trends Report.

Oklahoma City is home to Fort Sill Army post and Tinker Air Force Base, which includes the Oklahoma City Air Logistic Complex—the state’s largest single-site employer.

However, as of late February, these housing markets have not seen a major surge in inventory that would indicate that federal workers who have lost their jobs either through firings or buyouts are rushing to offload their homes.

Likewise, there has been no dramatic jump in the number of days that homes in and around DC stood unsold, and there has been no upswing in price cuts on for-sale homes that would signal a pivotal shift in the state of the local market.

“For now, housing conditions in these areas are not notably different from other markets,” says Hale.

Research by Realtor.com economists suggests that the typical homeseller takes at least two weeks and often even longer to prepare their property for sale, meaning that any real impact from Musk’s mass firings will be seen only in the weeks ahead. 

Price cuts on DC-area listings ticked up by 2.3 percentage points compared with last February, virtually in line with the national trend, placing it 23rd on the list of metros with the largest increases in price reductions. The median list price per square foot in DC has also seen a modest decline year over year, by 3.3%.

Thousands of federal workers have been fired or offered buyouts by Elon Musk’s Department of Government Efficiency.

(Andrew Harnik/Getty Images)

Signs pointing to future market shifts

But a closer look at the February data coming out of the capital shows that DC’s share of price reductions has inched up each week since the start of the month, suggesting that broader effects from the purges at federal agencies could become more apparent as the spring market unfolds.

“Local housing trends are often influenced by employment conditions, so these areas may see changes over time,” notes Hale. “While some effects are expected, the full picture is still developing.”

Lisa Sturtevant, chief economist at Bright MLS, the regional listing service that covers the mid-Atlantic, agrees, saying that it is likely that the changes to the federal workforce will affect the region’s housing market, but not just yet.

“The decision to sell a home or move is not one people take lightly, and it may be several weeks or even months before we know how the housing market will be affected,” the economist writes in Bright MLS’ weekly housing market update for the week ending on Feb. 23.

The Washington, DC, housing market is bracing for the impact of the firings of federal workers.

(Getty Images)

The DC area saw a noticeable uptick of just over 20% in new listings last week compared with the prior week. Fresh inventory was also up 12.9% year over year.

There are also indications that prices are starting to soften in the capital and the surrounding area. During last week, the median asking price for new listings was up just 1.2% compared with the same period a year ago, and was flat week over week.

At the same time, 7.5% of active listings in the region experienced price cuts, which is slightly higher than the share of for-sale homes with price reductions in the entire Bright MLS service area, which encompasses six states and Washington, DC.

DOGE purge inspires real estate hoax

Since the launch of DOGE’s government downsizing and spending reduction mission, the focus has been on the DC housing market, so much so that earlier this month, a hoax spread online alleging that huge numbers of local residents were panic-selling their homes. 

A doctored image using the mapping function of Realtor.com appeared to show an explosion of new listings in the DC suburb of Arlington, VA.

Real estate experts were swift to debunk the bogus claims, stressing that while the DC market was in a cooldown period, it was far from triggering a fire sale. 

“DC is not a booming market, but it’s not crashing either,” Realtor.com senior economist Joel Berner said at the time. “It’s really pretty average within a national market that’s also cooling.”

How do federal worker hubs compare with other metros?

And while the employment status of federal workers concentrated in large numbers in places like DC, Virginia Beach, and Oklahoma City could potentially have a major effect on the local housing markets, a zoomed-out look at the U.S. as a whole tells a more nuanced story.

For starters, a Realtor.com analysis of the latest available nationwide housing data shows that there is no direct correlation between home prices in a city and the share of federal workers living there.

Although DC is by far the leading federal worker hub in the nation, its current median list price of $579,995 is significantly lower than in metros like San Jose, CA, and Los Angeles where federal employment is minimal. 

Cities with average or slightly above average federal employment share, such as Oklahoma City (4.2%) and Cleveland (2%), have seen mixed housing market trends, with the former experiencing a moderate price decline of 2.6% year over year, and the latter seeing double-digit growth of 14% compared with 2024.

These figures suggest that while federal employment can provide stability, other local economic factors, such as business investments and population growth, play a crucial role in the health of the local housing market.

5 metros with the largest share of federal workers

1. Washington, DC

Share of federal employees: 11%

Median home list price: $579,995

2. Virginia Beach, VA

Share of federal employees: 7%

Median home list price: $392,500

3. Oklahoma City, OK

Share of federal employees: 4.2%

Median home list price: $314,992

4. Baltimore, MD

Share of federal employees: 3.7%

Median home list price: $350,000

5. San Diego, CA

Share of federal employees: 3.1%

Median home list price: $949,995

Pooja Dantewadia contributed to this report.