Rising Buyer Activity in Mid-Atlantic as Rates Decline
New pending sales increase while prices see modest rises
Recent trends in the Mid-Atlantic housing market reveal that the number of home sales through September has been relatively stable compared to the previous year. However, there is a notable increase in new pending sales, indicating heightened activity expected in the upcoming months. The total number of new pending sales in September reached 19,945 within the Bright MLS service area, marking a significant uptick of 10.3% from last year's figures. The recent decline in mortgage rates, which have fallen by over a percentage point since spring, is drawing more prospective buyers into the housing market.
Homebuyers are experiencing more favorable market conditions. The median days a home spends on the market decreased to 13 days, a full four days longer than last year. While the market remains competitive, this trend indicates potential relief for buyers. Historically, before the pandemic, the median days on the market averaged around 25 days, showcasing how the landscape has shifted over time.
Despite seasonal declines, home prices continue to escalate in many local markets. September's median sold price stood at $410,000, reflecting a 6.4% increase year-over-year. Seasonal price adjustments are evident, as the median price saw a slight decline of 1.9% between August and September, suggesting typical market fluctuations.
Conditions in the Mid-Atlantic housing market are becoming increasingly favorable for buyers. The decrease in mortgage rates has recently plummeted to a 20-month low, hovering just above 6%. Notably, this decline in rates translates to approximately $300 savings on the monthly payments for those purchasing the median-priced home. The surge in mortgage applications indicates a healthy increase in home shopping activity throughout September, evidenced by the rising number of home showings and offers made.
Dr. Lisa Sturtevant, Chief Economist at Bright MLS, commented that many potential buyers have been holding out for more favorable mortgage rates. As rates have now decreased, both home buyers and sellers are motivated to participate in the market, which sets the stage for an active fourth quarter.
Active listings within the Bright MLS service area have seen a consistent increase over the past eight months. By the close of September, there were 38,205 total active listings—a 16.8% rise from the previous year. However, it’s important to note that current inventory levels remain at just over half of what they were in 2019, indicating ongoing inventory constraints.
Low inventory remains a critical driver of the persistent rise in home prices across the region. While the median sold price in September reflects a decline from the summer peak, it still represents a 6.4% increase compared to the same month last year. Observers predict that the combination of lowering mortgage rates alongside increasing housing supply will promote heightened buying activity in the coming months. This trend suggests that the wind down of 2024 may conclude stronger than in 2023. Nevertheless, affordability challenges may persist for some buyers as prices are expected to trend upwards. We may see heightened interest in more affordable markets compared to their pricier counterparts.
September 2024 Mid-Atlantic Housing Market by Region
Philadelphia
Lower rates and rising inventory fuel a dynamic fall market
With lower mortgage rates, many buyers are now prepared to enter the market. Philadelphia saw 5,660 new pending sales in September, reflecting a 5.9% increase from the previous year. However, the housing market's momentum is tempered by low inventory levels. Despite a six-month streak of increasing active listings, the total supply remains under half of the numbers from 2019. In September, home prices in Philadelphia reached a median sale price of $379,900. Although seasonal trends indicate some decline in prices, this figure represents a 7% increase compared to last year's prices.
Baltimore
Increasing activity hints at a bustling fourth quarter
While home sales in the Baltimore metro area have shown a year-to-date decline of 2.2% compared to last year, September's new pending sales climbed by 10.6%, illuminating an uptick in buyer interest. Active inventory in the region has grown for eight consecutive months, totaling 4,978 homes available for sale at the end of September—a notable 18.5% increase from the previous year. Meanwhile, home prices continue to ascend, with the median sold price recorded at $397,855, reflecting a year-over-year increase of 4.7%. The primary constraints in the Baltimore area remain a lack of inventory and persistent affordability challenges, especially in suburban markets.
Washington, D.C.
Sales in the D.C. area gain momentum as mortgage rates soften
In Washington, D.C, sales have remained steady over the past year, although new pending sales surged by 15.7% in September. Benefits of lower mortgage rates combined with increased inventory are making homeownership more attainable for prospective buyers. The D.C. metro area experienced an 18.9% rise in active listings year-over-year, which is likely contributing to the stability in home sales. Despite experiencing rising prices, the median sold price in September reached $599,000, representing an 8.9% increase compared to last year. The major obstacle remains high home prices, which continue to limit options for some buyers, particularly first-time buyers. Nevertheless, the increased inventory is expected to provide a wider selection and ease price pressures.
Frequently Asked Questions
How are mortgage rates currently affecting sales in the Mid-Atlantic?
Mortgage rates have decreased significantly, making it more attractive for buyers to enter the market. This has led to an increase in pending sales as more prospective buyers are motivated to make purchases.
What are the current median home prices in the Mid-Atlantic area?
The median sold price in the region is $410,000, representing a 6.4% increase compared to the same time last year, despite a slight seasonal decline.
How has inventory changed in recent months?
Inventory levels have been rising for eight consecutive months, leading to a total of 38,205 active listings by the end of September, which is a 16.8% increase from the prior year.
Are there any regions in the Mid-Atlantic that are seeing more sales activity?
Yes, regions like Philadelphia and Washington D.C. are experiencing increased sales activity due to lower mortgage rates and increasing inventory levels.
What challenges do buyers face in today's market?
Despite favorable mortgage rates, buyers are still grappling with affordability challenges due to rising prices and limited inventory, particularly in specific markets.
