Even as mortgage rates hit a twodecade high, home prices across the mid-Atlantic continue to rise, reflecting the push and pull between unrelenting demand and low supply in the market, according to the Bright MLS Mid-Atlantic August Housing Report released recently.

“Despite the run-up in home prices across the mid-Atlantic in recent years, housing remains somewhat more affordable than in the high-cost West coast markets, which is why prices have largely been immune from declines some other parts of the country have seen in 2023,” said Dr. Lisa Sturtevant, Bright MLS chief economist. “However, affordability is becoming a bigger challenge, with mortgage rates above 7%, and will push more buyers out of the market.”

In August, the median sale price in the mid-Atlantic region was $401,000, up 5.5% compared to a year ago. Like July, condo prices rose fastest, 9.7% year-over-year, followed by townhomes, at 7.6%, which reflects buyers turning to options that are more affordable.

Sales activity continues to track below where it was a year ago, but the gap has been shrinking. There were 19,898 new pending sales in August across the region, down 17.3% from a year ago. The number of closed sales was 17.2% lower than last August.

Low supply continues to constrain buyer activity. After rising earlier in 2023, the number of active listings in the mid-Atlantic has declined for three consecutive months, down 11.4% compared to a year ago. The number of homes available for sale is less than half of what it was in 2019.

That low inventory means that the market continues to move quickly. The median days on market in August was eight, meaning half of all homes sold in the mid-Atlantic last month sold in eight days or less.

The mid-Atlantic region’s most affordable markets generally saw the strongest price growth in August. Prices were up 7.7% in Central Pennsylvania and rose by 10.1% year-over-year in the Maryland/ West Virginia Panhandle. But prices were up broadly across the midAtlantic, including in some second home markets such as the Del/Mar Coastal area (+11.0%) and the Maryland Eastern Shore (+22.0%).

Looking ahead, expect new listing activity to remain low throughout the rest of the year, though there will be small gains in month-end active listings as sales activity contracts. Overall, though, the mid-Atlantic housing market will still be unbalanced, with more buyers than sellers, which will continue to support stable prices in most local markets.

KEY MARKET TAKEAWAYS

Philadelphia metro area: Home prices up again in August, high mortgage rates have not slowed price growth in the Philadelphia area market

In August, the median sales price in the Philadelphia metro was $370,000, matching the region’s record high and up 5.7% from a year ago. Prices have risen faster in the Philadelphia area than in many other parts of the country, fueled by strong demand, low inventory and relative affordability.

Inventory is incredibly low in the region. The tightest inventory in the region is in the suburbs where there is less than 1.5 months of supply.

New listing activity is expected to remain very low throughout the rest of the year. While there will be small gains in month-end active listings as pending sales activity contracts, supply is still going to be very low, and prices will likely continue to rise.

Baltimore metro area: Record high home median sales price in August, price growth continues in the Baltimore metro area

In August, the median sale price in the Baltimore metro area was $385,000, a record high matching the June median price. Prices rose 4.6% regionwide between August 2022 and August 2023 and the median price is more than 30% higher than before the pandemic. Prices continue to rise despite persistently elevated mortgage rates.

Affordability is a growing challenge for homebuyers, but despite high rates and rising prices that have led to higher payments, buyers still remain active in the Baltimore area market. The region’s suburban submarkets have remained particularly competitive.

Low inventory continues to drive price growth and there is no expectation of significant supply increases this year.

Washington, D.C. metro area: Home prices slid over the summer but remain high, Competition remains strong in the Washington, D.C. area housing market

In August, the median home price in the Washington, D.C. metro area was $585,000, which is down from the peak of $600,000 in June. However, prices are still rising year-over-year, with the August median home price up 5.4% compared to last year at this time.

Compared to a year ago, prices are rising fastest for townhomes and condominiums, which tend to be more affordable than single-family detached homes in the Washington area. But more buyers are being priced out of the market. New pending sales are significantly lower than they would be in a more typical housing market, and showings are also down.

Expect new listing activity to remain very low throughout the rest of the year. There will be small gains in month-end active listings in the Washington, D.C. metro area as sales activity contracts. Supply will still be an obstacle to a balanced housing market, and home prices should remain stable in the region this year. ■