The price of a home continues to rise in the Baltimore metro area, but for the first time in about three years, the number of homes for sale has also increased.
According to data from Bright MLS, home inventory is up slightly year-on-year — up 2.5% — the first year-on-year increase since June 2019. The inventory surge isn’t being caused by a flood of new homes, it’s being caused by people rising out of the housing market and buying fewer houses when interest rates rise.
“I think we’re going to see a pullback in buyers in places like Baltimore,” said Lisa Sturtevant, consulting economist at Bright MLS.
First-time homebuyers are particularly sensitive to rate hikes, she said. People have saved money for homes, but even a slight increase in the interest rate can put someone out of the market.
“The numbers just don’t work anymore,” Sturtevant said.
New outstanding sales in the Baltimore metro area fell 1.4% from April to May, the largest decline in the Mid-Atlantic region. There were also about 90,000 screenings in May, down 11.5% from April, but still higher than before the pandemic.
Even with fewer homes being sold, the average home sale in the Baltimore area is still increasing, reaching $375,000 in Maya, a 10% increase from the previous year.
Sturtevant pointed out that home sales can be a lagging indicator — sometimes falling a month behind the current market — and she expects home prices to continue to rise, but not as fast as they have during the pandemic.
Even with fewer people buying, the Baltimore area is still under intense pressure for more housing. The housing stock has been on sale for less than a month and the average home spends just six days on the market before it is sold. Before the pandemic, an average home in the area stayed on the market for 40 days.