Birds aren’t the only ones looking for a new nest this spring, as Maryland saw more buyers seeking to purchase a home in March, according to data from Maryland REALTORS.
But while buyers are returning to the market, the pool of homes for them to choose from is looking more like a puddle.
Maryland’s housing inventory has shrunk 21.7%, and new listings declined 24.6% compared to a year ago.
That’s in contrast to national trends, which saw active listings climb about 8-10% year-over-year, though still below pre-pandemic inventory levels.
Maryland home sales were down 4.4% in March compared to one year ago, with 4,874 housing units sold last month. It’s “a disappointing—albeit understandable—decline,” according to Sage Policy Group, an economic and policy consulting firm.
“Maryland’s economy also remains weaker than the nation at large,” said Anirban Basu, chair of the Sage Policy Group, in a statement. “The state has added jobs in just two of the past eight months, and total employment is down by nearly 50,000 over the past year. That has caused the state’s unemployment rate to rise to 4.3%, up more than 2 percentage points from the 2023 all-time low—and this has been compounded by a sharp decline in the state’s labor force, which has shrunk by over 25,000 people over the past year.”
Mortgage rates are considerably lower than last year. But the war in Iran – and the rise in Treasury yields as a result – have caused the 30-year fixed rate to surge from an average of 5.98% during the week ending Feb. 26 to 6.46% by the first week of April, according to Sage Policy Group.
Rates dipped to an average of 6.37% in the second week of April, but economists don’t expect rates below 6.0% any time soon.
“Of course, that’s not the only way the Iran conflict has harmed the housing market,” Basu said. “The recent and rapid rise in oil and gas prices has already taken money out of consumers’ pockets. Just as damaging as the actual cost is the effect on consumer confidence, which is down 9% year over year according to the University of Michigan Consumer Sentiment Index.” Long-term, more severe impacts will emerge from higher diesel prices, which have risen at an even faster pace and will put upward pressure on a broad range of prices.
Meanwhile, home prices are still rising, with the average sales price up 4.9% to $513,997, and the median price up 1.6% to $430,000.
The number of homes that are under contract but have not yet closed increased by 8.7%, which bodes well for home sales in the coming months, according to Sage Policy Group.
While Maryland REALTORS said the nearly 9% increase in pending sales is a signal that more buyers are entering or returning to the market, they also emphasized that supply is lagging behind demand.
“Buyers are clearly coming back into the market, but the supply simply isn’t there,” said Denise Lewis, 2026 President of Maryland REALTORS, in a statement. “Pending sales are up, but without more homes to buy, that demand can’t fully translate into closed sales.”
As the listings shortage persists, buyers are encountering higher prices and fewer opportunities.
“This is a supply problem, plain and simple,” Lewis said. “Until we see more homeowners listing and more homes being built, affordability will remain a challenge and sales will remain constrained.”
Barriers to housing construction are hindering Maryland’s market, according to Lewis.
“For years, local restrictions and a lack of political will have made it harder to build the housing Marylanders need,” she said. “And unfortunately, we’re seeing that continue in Annapolis, to the detriment of Maryland voters.”
In their legislative session that ended Monday, the Maryland General Assembly passed the Housing Certainty Act (HB 548 / SB 325), which aims to spur housing production delaying the fees that developers have to pay until after the completion of projects.
The legislature also passed the Maryland Transit and Housing Opportunity Act (HB 894 / SB 389), which seeks to create more housing – and better connected projects – through transit-oriented development.
Both pieces of legislation will head next to Gov. Wes Moore’s desk.
But Lewis said the steps lawmakers took this session are not enough to address the state’s housing affordability and availability crises.
“Legislators are taking incremental steps forward, but still falling short where it matters most,” she said. “They’re advancing some helpful measures, but they chickened out on the Starter and Silver Homes Act (HB 239/SB 36)—which would have created more attainable housing options—and turned the Bring Back Main Street initiative (HB 1137 / SB 829) into yet another study.”
Marylanders are looking for leaders to take bigger actions on housing, Lewis said.
“We don’t need more studies—we need more homes,” she said. “Ignoring practical solutions and yielding to local government obstruction only makes the problem worse. If we’re serious about affordability, we must be serious about increasing supply.”
The housing market is seeing the “lock-in effect” of low fixed rate mortgages fade, which Sage Policy Group said could lead to a growth in available inventory. Resolving the conflict in Iran would also improve the year’s economic outlook and support homebuyers in Maryland and nationwide.
“Ultimately, it appears that broader economic factors may rain on the spring selling season yet again in 2026,” Basu said.
