(The Center Square) – More options are coming to the Maryland housing market for those seeking to buy a home.
Houses haven’t been this costly since the housing bubble in 2006, according to the National Association of Realtors’ housing-affordability index, which fell to 102.5 in May. In July 2006, the index was 100.5, the Wall Street Journal reported.
The number of units sold in the Free State is also dropping, Maryland Association of Realtors President Craig Wolf said, but prices aren’t.
“The average price continues to jump about 10%,” he told The Center Square.
He said that first-time homeowners are still struggling to afford a house that was in their budget a few months ago. In Maryland right now, the average home sale price is $487,000. A year ago, it was $442,000, according to Wolf.
Rising interest rates have also challenged affordability as well, Wolf noted; interest rates reached a high of 5.7% in June. In July, he pointed out the rate fell to 5.3%, which will help a little.
Overall, indicators show the market is slowing down as the number of sales dropped 23% over a year ago.
“That’s a huge number from one year to another,” Wolf said.
In addition, escalations and multiple offers are starting to ease. Sellers’ expectations haven’t caught up. He told of one broker’s experience with a homeowner who anticipated a much faster sale.
He said, “They put their house on the market Friday, and the house did not sell by Monday, and they were contemplating canceling their agreement” with that real estate agent and finding another one because the house took more than three days to sell.
He added the escalated situations remain, but they’re not as rampant.
For 2022, new listings are also down by almost 1,700. Last year the number of new listings nearly hit 12,700, while this year is at just over 11,000, according to Wolf.
Inventory sits at 1.1 months. But he expects that to change.
“I really believe that number – that 1.1 – will steadily increase throughout the rest of the year,” he said. “I believe there will be an increase in inventory simply because houses aren’t selling as fast. Now that there’s a little bit more stability, some sellers may put their houses on the market.”
Because inventory is still so low compared to the number of buyers, however, Wolf doesn’t expect the increase will have any dampening effect on prices.
“It’s still a strong seller’s market,” he said. “Just not as strong as it was a year ago.”