Persistently high mortgage rates and economic uncertainty foster a “wait-and-see” approach
NORTH BETHESDA, Md., Feb. 11, 2025 /PRNewswire/ — Prospective home buyers and sellers who were hoping to get into the market in 2025 may be waiting a little longer. Market activity was sluggish to start the year, as mortgage rates remained stubbornly near 7% throughout January. Economic and political uncertainty have also caused some to re-evaluate the timing on a home purchase or sale.
A total of 13,117 transactions closed in January, which is an 8.5% increase over January 2024, but reflects offers made on homes at the end of 2024. New contract activity, on the other hand, slowed in January. With 14,971 new pending contracts last month, activity was down 5.2% compared to a year ago.
“There is a lot of pent-up demand in the market, and many buyers who have been on the sidelines were hoping 2025 would be their year,” said Dr. Lisa Sturtevant, Bright MLS Chief Economist. “Economic uncertainty and affordability challenges are going to cause some of those buyers to put off their purchase until later in the year.”
Sellers also appear to be pausing. Listing activity was higher than it was in December, when the number of new listings hit a record low. But the 16,680 fresh listings coming onto the market in January represents a 3.0% decline compared to last January.
Inventory has been a constraint on the Mid-Atlantic housing market, and there is a silver lining to the slower pending sales activity. The supply of available homes for sale has been increased. At the end of January, there were a total of 31,191 homes available for sale across the Bright MLS service area, a 15.7% gain from a year ago.
Home prices are still rising throughout most of the Bright MLS region, though the pace of home price appreciation slowed in January. The median sold price for the region was $390,000, a 5.4% increase, the slowest pace of home price growth since last August.
Persistently high mortgage rates have been a drag on the housing market to start the year. Rates will likely come down this spring, but there could be a lot of volatility in the interest rates borrowers see. If mortgage rates do dip, buyers are going to move opportunistically, which could set us up for an unpredictable spring market.
January 2025 Mid-Atlantic Housing Market by Region
Philadelphia:
Philadelphia area housing market resilient to kick off 2025
Baltimore:
Affordability and uncertainty keep Baltimore area buyers on the sidelines
Washington, D.C.:
Washington D.C. area buyers and sellers cautious in January
The full Mid-Atlantic and market metro area reports are available at BrightMLS.com/MarketInsights.
About Bright MLS
Bright MLS was founded in 2016 as a collaboration between 43 visionary associations and two of the nation’s most prominent MLSs to transform what an MLS is and what it does, so real estate pros and the people they serve can thrive today and into our data-driven future through an open, clear, and competitive housing market for all. Bright is proud to be the source of truth for comprehensive real estate data in the Mid-Atlantic, with market intelligence currently covering six states (Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia) and the District of Columbia. Bright MLS’s innovative tool library—both created and curated—provides services and award-winning support to well over 100K real estate professionals, enabling their delivery on the promise of home to over half a million homebuyers and sellers monthly. Learn more at BrightMLS.com.
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SOURCE Bright MLS
