Maryland’s real estate market is following nationwide housing trends, with prices continuing to grow even as inventory also increases.
The past several months have seen an increase in real estate inventory throughout the United States, after falling to a four-decade low during the pandemic, according to reporting in Fortune Magazine.
In Maryland, the amount of inventory has been rising since hitting a low of 5,217 active units in February, per data provided by Maryland Realtors, an association representing the state’s real estate agents. According to the organization’s May 2022 data, that number has since increased to 7,706, though it is still down about 35% from this time last year.
Months of inventory, a metric that is calculated by using current available inventory and monthly sales over the past year, has also been increasing by approximately a tenth of a month, each month, since February. In May, 0.9 months of inventory was available, up from 0.6 months in February — again, well below May 2021’s figure of 1.2 months.
Unit sales are also declining year-over-year, with data showing that 8,467 units were sold in May 2022, a 12.3% decrease from May 2021.
These statistics mirror nationwide trends. Realtor.com® Economic Research declared that May was a “major turning point” in inventory, with more new listings entering the market than any month since June 2019.
Craig Wolf, 2022 president of Maryland Realtors, noted the impact of higher interest rates on the market.
“While the easing of inventory is a good thing, opening opportunities for homebuyers, we’re also seeing mortgage interest rates climbing, which dampens sales,” he said in a news release. “Freddie Mac reported that the 30-year rate has jumped to 5.23%, up from 5.09% last week. In May 2021, the average rate was 2.96%. Rates are expected to increase throughout 2022, which means if you’re looking to buy a home, doing so sooner rather than later can assure the best possible rate.”
According to the report in Fortune, which used data collected from Zillow, inventory is up in 83% of the nation’s 400 largest housing markets over the course of the six weeks leading up to May 7.
This included both the Baltimore-Columbia-Towson metropolitan area, which saw a 14% increase in inventory and the Washington-Arlington-Alexandria area, which had a 19.1% increase.
Nevertheless, other real estate metrics in Maryland indicate that the market remains hot. House prices have continued to increase, rising to a median price of $405,000 in May, up 9.5% from $370,000 this time last year. The median number of days a unit stayed on the market this month — six — was the same as it was in 2021.
This increase in median price also in line with trends throughout the United States. In fact, data from Realtor.com® Economic Research indicates that house prices may be rising at an even faster rate nationwide than they are in Maryland; nationwide, the median listing price of a home in May $447,000, up 17.6% from last year.
Housing experts have attributed the increase in inventory to a spike in mortgage rates; the average 30-year fixed mortgage rate increased from 3.11% at the end of last year to 5.23% as of June 9, a result of steps the Federal Reserve is taking to slow inflation.