Learn more about the housing market in Maryland

Every state is unique when it comes to the real estate market. That’s why it’s critical to understand the market you live or operate in. Whether you’re renting, buying, or selling, it will impact many aspects of your life.

Maryland Housing Market Overview 

Also known as the Old Line State, Maryland is a Mid-Atlantic state on the Chesapeake Bay. It is known as much for its urban areas as it is for its seaports and fishing industry. Some of the largest cities in Maryland include Baltimore, Columbia, and Germantown.  

According to data from IBISWorld, real estate, rental, and leasing was the most profitable sector and contributed the most to its GDP in 2023, making an overview of its housing market very worthwhile. Maryland housing market predictions indicate that economic uncertainty, low inventory, and rising home prices will continue to shape the market. 

At the beginning of 2024, real estate experts predicted that Maryland housing prices that had risen all throughout 2023 would continue to rise, reflecting a steady increase in the number of homebuyers. After the number of newly listed homes dramatically decreased in 2022, 2023 saw a sharp increase that contributed to more competitive market prices, and this trend was only expected to continue. As of April 2024, this seems to be the case, as other publications recognize that prices are only continuing to increase. Maryland housing trends show brisk sales and rising prices, particularly in communities near the Baltimore or Washington D.C. metro areas. This signifies an imbalance created by steadily rising demand with supply that cannot keep up.  

Experts in the same article predicted that interest rates that were approaching 8% at the end of 2023 would stabilize by the second half of the year but remain over 6%. According to Zillow, this prediction has come true, as interest rates in Maryland have stabilized at 6.72%, five basis points below the national average of 6.77%. Based on these changes, the housing market in Maryland may be expected to stabilize on other fronts as well.

Maryland Housing Market Trends 

To understand the Maryland real estate market, it’s important to keep up with trends such as the average price and rate of rising property prices in Maryland. Let’s look at some key real estate trends in Maryland: 

Note: These statistics are based on Redfin’s monthly housing data from April 2024.

Median Home Price

The median price of a home in Maryland as of April 2024 was $429,500, according to Redfin’s monthly housing market data. This is an increase of 5.7% from April 2023. In Baltimore, Maryland’s most populous city, the median price in April 2024 was considerably lower at $200,000, a decrease of 4.8% from the previous year. Annapolis, the capitol city, had median prices much higher than the statewide median at $612,000, a 7.4% increase from April 2023.  

The list price plays a significant role in competitive market dynamics and seller dominance, with many homes being sold above or below the list price depending on the market conditions. 

Number of Homes Sold in April 2024

5,879 homes were sold in Maryland in April 2024, which is a 7.9% increase from the previous year. Though this suggests an increase in inventory throughout the year, this number falls considerably short of numbers seen in the summers of 2021 and 2022. 

However, it is important to keep in mind that nationally speaking, sales usually peak during the spring and summer months and slow in the winter. In fact, the National Association of Realtors (NAR) predicts that in February and March alone, sales activity increases by as much as 34% and prices by 3%.  

Median Days on Market (DOM)

Days on market (DOM) is a measure of the average length of time a home remains listed on the market before being put under contract. A lower DOM signals a highly competitive seller’s market with more pressure on buyers to make higher offers and remove contingencies. A higher DOM signals a buyer’s market as sales are slower and sellers have less leverage.

The median DOM in Maryland in April 2024 was 24 days, which is down from 25 in April 2023. This means that on average, listings spend under a month on the market before they are purchased.

New Supply Statistics

In 2021, there were about 3 new residential construction permits per 1,000 people in Maryland. This statistic, which points to the rate of new housing inventory, is near the national average. Increased housing supply is predicted to ease housing prices and increase affordability in many markets across the U.S. in 2024. 

Property Tax Rate

According to Rocket Mortgage, the average property tax rate in Maryland is 1.05%. This is higher than 31 states in the country, and its average annual property tax is around $3,047.08. However, it is important to keep in mind that this statistic reflects the average of a lot of data in a populous state with significant geographic and economic diversity. Tax rates are likely to vary depending on the value of a home and its location in the state.  

Foreclosure Rate in Q1 of 2024

In the first quarter of 2024, 1 in every 1,010 homes in Maryland experienced a foreclosure filing, according to recent data from ATTOM. This is significantly higher than the national average, and Maryland is ranked 8th nationwide for its foreclosure rate. 

Hottest Local Markets in Maryland 

Here are a few of the top local housing markets in Maryland for 2024, where the median sale price provides a benchmark for understanding the overall price trends within the housing market: 

1. Baltimore

Baltimore is the most populous city in Maryland by a significant margin. A historic seaport, Baltimore is situated along the western coast of the Chesapeake Bay, north of the capital city of Annapolis. Though its median home price decreased 4.8% from April 2023 to April 2024 to $200,000, the number of homes sold in the state saw an increase of 11% in April 2024. Some of the most popular neighborhoods in Baltimore include Canton, Frankford, and Riverside. 

2. Columbia

Columbia is the second most populous city in Maryland, located further inland from the Chesapeake Bay and southwest of Baltimore. The city saw a 6.1% increase in median home sale prices between April 2023 and 2024, landing on $470,000. Its median DOM increased to 12 days in April 2024, and while that increase suggests a shift in buyers’ favor, it is important to consider that such a relatively low number still suggests a competitive seller’s market. Some of the most popular neighborhoods in Columbia are Long Reach, Hickory Ridge, and Kings Contrivance. 

3. Annapolis

Annapolis is the capital city of the state of Maryland. Situated along the western coast of the Chesapeake Bay, its population is relatively modest compared to other cities in the state. However, its housing market has seen considerable growth in the past year.  

Home sales volume in Annapolis increased by 26.4% year-over-year in April, a number that can be expected to rise over the summer. Its DOM is down to 19 days from 26, suggesting that the market is becoming increasingly competitive. Some of the most popular neighborhoods in Annapolis include Edgewater, Pasadena, and Glen Burnie. 

Economic Factors Impacting the Maryland Housing Market

A holistic view of Maryland’s housing market requires a basic understanding of the main economic drivers affecting the market. Let’s take a look at a few critical ones below: 

Mortgage Rates

Mortgage rates are a common cause of concern for would-be homeowners across the U.S. in 2024. As previously mentioned, Zillow lists Maryland’s current 30-year fixed-rate mortgage averages around 6.72%, which hovers just below the national average. As predicted, this number has settled significantly when compared to the numbers seen towards the end of 2023.  

Inflation and Cost of Living 

Mortgage rates are tied to inflation, another massive contributing factor to the affordability of housing and the state of housing markets in general. Inflation has increased the cost of living for many across the U.S., including in Maryland. This means fewer people can truly afford to limit housing costs to less than 30% of their monthly income. 

Population Changes and Demographics

A changing population can also have implications for the housing market. According to the U.S. Bureau of Labor Statistics, the unemployment rate in Maryland, 2.6%, is the fifth lowest in the country. This low unemployment rate suggests a thriving and healthy economy that is bound to help the housing market in the state.

Maryland Housing Market Forecast 2024

As previously mentioned, multiple sources considered the appreciating housing market Maryland faced in 2023 and predicted that prices would continue to rise throughout the year. This has proven true over the course of the year, although steadying interest rates and a hope for increased supply in the housing market signified by an increase in sales may indicate a slowing growth in prices.  

However, it is also important to monitor home prices dropping, as this can have significant implications for buyers, sellers, and the overall housing market. Sustained drops in home prices may indicate broader market challenges and affect affordability for buyers. 

Likelihood of Maryland Housing Market Crash

Though surging prices in the Maryland housing market may seem concerning, experts uphold that a crash is significantly unlikely. There are many reasons for this, including a very healthy economy signified by a low unemployment rate, interest rates that have significantly settled from last year, and a growing number of people who are moving to the state. The market seems poised to continue appreciating and is unlikely to reach a concerning point any time soon.

Forecast for the U.S. Housing Market

Now that we’ve looked at Maryland’s housing market, let’s zoom out a little bit. What about the U.S. housing market? What do you need to keep an eye on in the coming years?

The United States’ current median existing-home sale price is around $384,500 per the National Association of Realtors. The inventory, though, remains low. A balanced market typically has a 5-to-6-month supply, but the current figure is 2.9. 

We’re currently in a seller’s market with buyers looking at continued rising house prices. Sellers have the upper hand in negotiations due to rising prices, limited inventory, and strong demand. The same trend can be seen with renters. Housing continues to appreciate, in general. 

Dr. Lawrence Yun, Chief Economist and Senior Vice President of Research, National Association of Realtors, believes the housing market will appreciate 15 to 25% over the next five years. He thinks that the seller’s market will continue because housing inventory will remain low. In five years, however, he predicts a more balanced market, in which neither party has a built-in advantage. Thus, the market will shift to a case-by-case basis to determine what kinds of deals people can get.  

Hybrid work also impacts the housing market. This shift in work culture means suburbia will continue to grow. States like Texas, the Carolinas, Tennessee, and Florida should see continual growth.

The number of single-family homes built decreased over the past couple years while the number of multi-family homes increased due to lower prices and a demand for affordable housing. Higher mortgage rates and inflation (affecting price of materials) were the main causes.

Lower income households continue to struggle in the current housing market. This trend appears likely to continue into the foreseeable future. Without enhanced supply or helpful subsidies, the outlook is that many Americans will still wrestle with housing affordability in the years to come.

Maryland Rental Market

The rental and buying market are obviously closely linked. When home prices fall, landlords are more likely to buy properties to rent out. Home prices and rental prices are correlated as well because a hot market means prices rise.

Rents were more unaffordable than ever in 2021 and 2022. In 2022, 22.4 million households paying rent said it was unaffordable, which is the highest that figure has ever been, according to a January report from the Joint Center for Housing Studies at Harvard University. The study found that half of all renters in the United States spent over 30% of their income on rent and utilities.  

The markets cooled in 2023, though, due to new units and decelerating demand. But a serious problem persists: Rent increases are still outpacing income gains.

Moreover, high interest rates are keeping borrowing and transaction activity down. Over half the banks surveyed by the Federal Reserve reported that demand for multifamily loans decreased year-over-year.

The pandemic caused a housing disparity that isn’t going away anytime soon. Unaffordable housing is a serious issue across America. Whether high rents or low income is the main cause doesn’t change the fact that this problem is widespread.

This short summary leads directly into Maryland’s current rental market. Below are just a few of the current trends for Maryland’s rental market based on data pulled from Zillow:

Maryland Rental Market Key Trends 

• Median rent: $1,850 

• Month-over-month rent charge: $0 

• Year-over-year rent charge: +$25 

• Available rentals: 7,066

Conclusion

The diversity of Maryland’s industries and environments means that its average housing market statistics are pulling from a mix of urban and rural populations, where the housing market is experiencing very different conditions. As a whole, however, the state’s market continues to stabilize while pointing to a slow in its rapid growth. Experts and analysts will continue to monitor this market, as well as nationwide factors like interest rates and new construction.