NORTH BETHESDA, MD — 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
Baltimore:
Affordability and uncertainty keep Baltimore area buyers on the sidelines
- In January, the number of new pending sales across the Baltimore metro area was 6.3% lower than it was a year ago. Showing activity was also down by 5.8%.
- The median sold price in the region was $363,000 in January, a 2.3% year-over-year increase. This is the slowest pace of home price appreciation since May 2023.
- There are signs that buyers have hit an affordability ceiling, particularly in the region’s suburban markets. Home prices have risen by more than 40% over the past five years.
- There were 2,143 new pending sales in the Baltimore metro area, a drop of 6.3% compared to a year earlier. Pending sales activity was down dramatically in Howard County (-17.2%).
- Listing activity is also relatively slow in the Baltimore region. A total of 2,223 new listings came onto the market in January, up from the record low in December, but still three percent lower than a year ago.
Washington, D.C.:
Washington D.C. area buyers and sellers cautious in January
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- While closed sales were up compared to a year ago, new pending contracts fell by 6.4% year-over-year. The number of showings in the region was down 6.5% compared to last January. The District of Columbia and Montgomery County, Maryland were the two major markets within the region that bucked the trend with more new pending contracts in January.
- Listing activity was also relatively slow. While the number of fresh listings increased from December’s record low, overall listing activity was down 4.1% compared to last January.
- Buyers that are in the market are taking more time to make an offer. The median days on market in January was 23, which was three days slower than last year and four days slower than the December pace.
- In January, the median sold price was $558,285, up 4.4% compared to a year ago, the lowest year-over-year price change since October 2023.
- Prospective buyers and sellers face uncertainty to start the 2025 housing market. New administration policies could have an outsized impact on the Washington D.C. area housing market, though it is still too early to predict if and how the market might be affected.
Philadelphia:
Philadelphia area housing market resilient to kick off 2025
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- Compared to other markets in the Bright MLS service area, housing market activity in the Philadelphia metro area was relatively strong.
- Relative affordability has contributed to the resiliency of the region’s housing market. However, that affordability advantage may be starting to erode.
- In January, the median sold price was $357,250, up 5.1% compared to last year, the slowest pace of home price appreciation since June 2023. Home prices have risen by nearly 50% over the past five years.
- There were 4,453 new pending sales in the Philadelphia area market in January, down just 2.4% from a year earlier. Closed sales rose by 9.0% year-over-year.
- Buyers are taking more time to make an offer. In January, the median days on market in the Philadelphia metro area was 21 days, up three days from last January, and the slowest market pace since February 2023.
