A Look At The Maryland Housing Market 2022

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Since the start of the pandemic, the housing market has been a chaotic buying environment, especially for first-time buyers. Early on, low rates led to an extremely competitive market where bidding wars and homes going far above the asking price were not uncommon. With the new year well underway, we wanted to take some time to analyze the state of the Maryland housing market and help you make your buying goals for 2022.

How Did We Get Here?

When the pandemic was first felt, there were concerns that a market crash may follow as buyers employ caution during uncertain times. However, that was quickly proven wrong as low-interest rates contributed to a run on the limited housing market in Maryland. If you’ve been hoping to buy over the last year, you may have encountered the challenges that come with a limited market, especially in hot buying areas such as Frederick or Columbia. Low rates can feed into bidding wars, cash transaction incentives, buyers taking on additional fees, and other challenges. If you were seeking to buy over the past year, you may have encountered these scenarios. The good news is that we may have a more accessible market on the horizon.

Where The Maryland Housing Market is Today

The housing market across the state remains hot according to both our experience and the available data. In 2021, homes only spent 7 days on average on market, as opposed to the 11 days spent in 2020. As that article by Norada highlights, buyers may still be stepping into competitive markets due to lower inventory across the state. As such, the median home price in the state rose 9.4% in 2o21, from $330,000 in 2020 to $361,000 in 2021. The situation gets more difficult when we look at active inventory, with only “6,447 units whereas in 2020 it was 10,385 units for sale.” These challenges have discouraged some homebuyers, however, there may be help on the horizon in the form of stabilizing mortgage rates that make for a more fair market for buyers.

Current Rates in the Maryland Housing Market

The average 30-year fixed-rate mortgage has risen to over 4.0% for the first time since the pandemic began in March 2020. On the surface, this may seem counterintuitive for buyers who would like the get the most affordable rate when purchasing a home. But low rates can help contribute to the situation we’ve seen over the last two years with high competition making it more difficult for average buyers to get in on the housing market. When rates stabilize, they can help cool off buying booms. What this means for you is that you may be able to find houses with fewer bidding wars or special conditions such as more down. This overall makes for a fairer houses process for buyers of all means.

What’s the Outlook for 2022?

As of now, it’s still difficult to determine exactly. The hope is that as rates continue to stabilize, the market will follow suit. However, in an era where pandemic fluctuations still persist and have the potential to create substantial slowdowns for the building material industry, it’s hard to know for certain. Another hope is that the price hike for home prices that was experienced in markets across the country will slowly begin to taper out as demand evens. Recently, the chief economist of Realtor.com predicted a price rise of 2.9%. While this is still an increase in price, it pales in comparison to the raise of over 9% Maryland saw in 2021.

As of now, it’s important to keep home buying expectations in check and be a prepared buyer. A great way to do that is by working with the right mortgage brokers to help you break into a competitive market. Being pre-approved, for instance, is a great way to help you appeal as a buyer. The team at Federal Hill Mortgage wants to help you get there. Apply today to get started.

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Federal Hill Mortgage

The Federal Hill Mortgage Team is here to supply you with all the information you need to shop for a mortgage that's right for you.