Homebuying in Maryland underwent seismic shifts from 2018 through 2023, particularly for middle-income households. This period saw a steady climb from a balanced market into an unprecedented pandemic-era boom, followed by a sharp cooldown as interest rates surged. Below, we analyze the data on what types of homes Marylanders earning under $250,000 are buying as primary residences, how buyer behavior has changed, and how recent trends compare to the prior decade’s housing landscape.
Market Overview: 2018–2023 in Review
Maryland’s housing market evolved from modest growth in the late 2010s to a frenzied peak in 2021 and a cooler, constrained market by 2023. Overall sales volume first rose and then fell dramatically, while prices marched steadily upward. Key statewide metrics illustrate this trajectory:
Sales Volume Rollercoaster
Approximately 84,000 homes were sold in 2018, then sales grew to ~96,000 in 2020 and peaked at ~107,000 in 2021. The pandemic unleashed pent-up demand and ultra-low interest rates, fueling a 10.5% jump in sales in 2021 over 2020. By contrast, 2022 sales fell back to ~84,600 (–21% year-over-year) as the post-lockdown surge subsided. In 2023, only ~67,500 sales closed, marking another –20.5% drop – the lowest volume in years.
Steadily Rising Prices
Maryland’s median home price rose from about $290,000 in 2018 to $400,000 by 2023. That’s an increase of roughly 38% in five years, significantly outpacing income growth and inflation. The run-up was especially sharp during the pandemic: the statewide median leapt 9.4% in 2021 alone, then another 6.5% in 2022 despite cooling sales. By 2023, prices were still edging up (the median rose 3.9% vs. 2022) even as demand softened – a testament to how limited supply propped up prices. The 2023 median sale price (~$400K) was $110,000 higher than in 2018.
Record-Low Inventory
The number of homes on the market hit record lows, making it a seller’s market for much of this period. At the end of 2019, Maryland’s active listing inventory was already down 36% compared to a year earlier. This trend intensified in 2020-2021: by late 2020, active listings were 60% below late-2019 levels. In 2021, inventory shrank further to a mere ~6,400 active listings statewide – extraordinarily tight for a state of Maryland’s size.
New listings also dried up: about 122,000 new listings hit the Maryland market in 2021, but this fell to ~102,000 in 2022 (–16%) as many potential sellers stayed put. By 2023, new listings were even scarcer (~83,000). This lack of inventory meant buyers faced intense competition for what few homes were available.
Interest Rates and Affordability Challenges
A crucial backdrop to these trends is the interest rate environment. In 2018, 30-year mortgage rates averaged around 4.5%. They then fell to historic lows during 2020–2021 – hitting ~3% or below by late 2020. Cheap mortgages greatly expanded buying power and spurred the 2020–2021 sales surge.
However, by mid-2022 the Federal Reserve’s inflation-fighting measures drove rates up sharply. The average 30-year rate more than doubled from about 3% in early 2022 to ~6.8% by 2023, reaching the highest levels in two decades. This rate spike dealt a blow to affordability: a typical Maryland homebuyer in 2023 faced monthly payments hundreds of dollars higher than a similar buyer in 2021. Many middle-income buyers were priced out or forced to lower their budgets as a result.
Housing affordability indices, which were comfortably above 100 in Maryland pre-pandemic (indicating a median-income family could afford the median-priced home), fell to much more challenging levels by 2023. In the Washington-Baltimore region, the NAR affordability index dropped from around 150 in 2021 to near 110 by late 2023, reflecting that the typical family’s income now barely covered the typical home. In short, 2023’s buyers faced a one-two punch of high prices and high interest rates that severely tested budgets.
From Pandemic Boom to New “Normal”
The 2020–2021 period was highly abnormal, with homes selling in mere days and bidding wars common. Maryland’s months’ supply of inventory fell under 1 month in 2021 (versus 3–6 months in a balanced market). By 2023 the market cooled from that frenzy, but it did not return to the buyer-friendly conditions of the early 2010s.
Instead, the “new normal” appears to be low transaction volume, persistent inventory shortages, and moderate price growth. The entire Mid-Atlantic region had 52,000 fewer sales and 123,000 fewer listings in 2023, yet a $110K higher median price than 2018. This underscores how supply-demand imbalance – fewer people selling homes, but those who do list can command much higher prices – is now the defining feature of the market.
Types of Homes and Buyer Decisions
What types of properties are Marylanders buying, and are they upsizing, downsizing, or relocating? The answer varies by life stage and income, but several clear trends emerged by the early 2020s:
Housing Types: Single-Family Dominates
Single-family detached houses remain the most sought-after type of home, especially for families. The majority of Maryland home sales are detached houses, and this was true throughout 2018–2023. For example, in 2022, detached single-family homes accounted for roughly 75% of sales statewide (with townhouses and condos making up the rest).
Middle-income buyers who could afford it overwhelmingly chose single-family homes – valuing the space and, often, yards for growing families. The pandemic only reinforced this preference: “space fever” had city apartment dwellers and condo owners eagerly trading up to standalone houses with home offices and backyards.
Many first-time buyers, however, had to adjust expectations. With prices soaring, those earning under $250K often started with townhomes or condos as their entry point, especially in pricey markets like the DC suburbs. Townhouses (including Baltimore’s iconic rowhomes) are prevalent in Maryland and tend to be cheaper than detached homes. These attached homes offered a middle ground – a bit of yard or multi-level living without the cost of a fully detached property.
Condos were another affordable option, particularly in urban areas or for downsizers; condominium sales gained traction among buyers who prioritized lower maintenance or could not afford a house in their desired location.
Generational Patterns: Upsizing vs. Staying Put
Younger buyers largely upsized during this period, while older owners mostly stayed put or downsized selectively. Millennials and young Gen X families in Maryland used the low-rate environment to leap from renting or condo living into larger homes. For instance, a typical scenario in 2018–2021 was a thirty-something couple selling a starter condo in Silver Spring or Canton and “trading up” to a single-family suburban house as kids arrived.
On the flip side, empty nesters and retirees showed a strong tendency to not move. Aging baby boomers in Maryland have been holding onto their houses longer than previous generations. In fact, a 2024 Redfin survey found 78% of older homeowners plan to “age in place” in their current home.
Those who did move often looked to downsize for lifestyle reasons – e.g., selling a large four-bedroom colonial in the suburbs in favor of a smaller rancher or a condo that’s easier to maintain. Downsizing was happening, but less than expected: many boomers discovered that trading to a smaller home didn’t save much money in Maryland’s high-cost market. A smaller replacement home might cost nearly as much as what they’d sell their current home for, giving would-be downsizers “sticker shock.”
Moreover, seniors who refinanced into ultra-low rates in 2020–21 have a financial incentive to stay put – moving could mean giving up a 3% mortgage for a new loan at 6–7%. All these factors kept many older Marylanders in place, limiting the turnover of single-family homes to younger buyers.
Migration Patterns: Seeking Affordability and Space
Maryland’s internal migration patterns showed movement from high-cost, dense areas toward more affordable, spacious ones. In the late 2010s, counties like Montgomery, Prince George’s, and Baltimore City lost population in net terms to counties like Anne Arundel, Carroll, and Frederick. Essentially, some residents left the expensive urban cores and close-in suburbs for relatively cheaper or more rural communities in Maryland.
This trend was supercharged by the pandemic’s remote-work revolution: suddenly, commuting distance became less critical, and buyers felt freer to choose housing in farther-flung parts of the state with lower prices or more land. For example, Frederick County (west of Montgomery) and Carroll County (north of Baltimore) saw an influx of buyers, as they offer larger homes and lower prices while still within reach of job centers.
Within metro areas, a city-to-suburb shift occurred: realtors reported many Baltimore City renters finally purchasing homes in surrounding counties where they perceived schools or safety to be better, especially during the pandemic. Baltimore City’s share of overall sales dipped slightly and its home prices appreciated more slowly (or even declined in 2023) compared to suburban markets.
Urban vs. Suburban vs. Rural Market Patterns
By 2023, a few geographic storylines emerged. Urban markets (like Baltimore City) remained relatively affordable but saw muted growth – the city’s median price ($215K in 2023) was nearly half the statewide median, and it was one of the only places to see slight price declines in 2023. Many city purchases were by investors or first-time buyers taking advantage of lower prices.
Inner suburbs and affluent counties (e.g., Montgomery, Howard, Anne Arundel) saw high demand and big price jumps; these areas offer a mix of job accessibility and larger housing, making them perennial favorites. Montgomery County, for instance, had a 2023 median price of $580K (up 32% from 2018), and despite a 24% drop in number of sales in 2023 vs 2022, its prices still rose 5% – indicating very tight supply at mid-to-upper price points.
Outer and rural areas (Western Maryland, Eastern Shore) experienced a boom in specific segments: vacation-home buyers and remote workers bolstered these markets in 2020–21, though activity cooled later. For example, Garrett County’s lake and mountain homes saw a surge – sales there spiked +36% in 2020 and prices jumped 25%, largely driven by out-of-area buyers seeking second homes or a COVID-era retreat.
Such regional variation means that buying trends for sub-$250K earners differ across the state: in Baltimore City or rural counties, this income could comfortably buy a home as prices are lower (often under $250K); in contrast, in Montgomery or Howard County, many households under $250K income struggled to afford anything more than a condo or townhome given higher price points.
Shifting Buyer Psychology
Throughout 2018–2023, buyer sentiment swung from optimistic to cautious. Early on, with reasonable prices and rates, first-time buyers felt encouraged – homeownership rates among under-40 households ticked up during the late 2010s. The pandemic initially caused panic (a freeze in March–April 2020) but soon led to a fear-of-missing-out buying frenzy in late 2020 and 2021, when cash offers and waived contingencies became commonplace.
By 2022–2023, however, buyers grew wary: the combination of high prices, rising interest costs, and economic uncertainty led many to pause their searches. Survey data in 2023 indicated affordability was the top concern for Maryland home shoppers, and some chose to continue renting or remain in starter homes rather than overextend their budgets.
Notably, even among those who could afford to buy, the pickings were slim – numerous would-be buyers simply couldn’t find a suitable home due to the dearth of listings. As a result, many households stayed put in their current residences, only buying if a compelling opportunity arose. This dynamic fed a vicious cycle: owners didn’t list their home for sale because they had nowhere affordable to move, which in turn contributed to low inventory for others.
Remote Work, Migration, and Lifestyle Shifts
One of the biggest influences on Maryland homebuying behavior from 2020 onward was the rise of remote work. When offices closed in 2020, many workers who formerly had to commute into D.C., Baltimore, or Northern Virginia suddenly had geographic flexibility. This led to several trends:
Suburban and Rural Flight
As mentioned, remote work enabled a subset of buyers (often with DC/Baltimore jobs and salaries) to relocate to farther-out counties in search of larger or cheaper homes. Maryland saw net domestic out-migration each year in the 2010s and early 2020s – more people moving out to other states than moving in. From 2020 through 2023, Maryland had a net loss of about 99,600 residents to other states, even as it gained residents via international immigration.
Much of this outflow went to lower-cost states in the South (Florida, the Carolinas) or nearby Delaware and Pennsylvania. High housing costs are a cited reason: retirees and even some middle-class families decided they could get a better home for less money elsewhere. Within Maryland, urban centers like Baltimore City and Montgomery County saw population stagnation or slight declines in the late 2010s, whereas suburban counties like Frederick grew, reflecting these migration choices.
Home Feature Priorities Transformed
Remote work changed what buyers looked for in a home. Home offices (or extra bedrooms) became a must-have for many in 2020–2021. Basements, bonus rooms, or detached studios that could serve as dedicated workspaces commanded a premium. Backyards and outdoor space also gained importance as people spent more time at home.
Maryland builders even reported shifting new home designs to include two home office spaces in larger houses by 2021, anticipating continued work-from-home arrangements. Moreover, the condo market initially struggled – condos in city high-rises or dense developments were less appealing when people craved space and separation.
By 2022, however, as offices reopened in hybrid fashion and prices for houses rose beyond reach, condos and townhomes regained popularity, especially among first-time buyers who found themselves priced out of the single-family market. The possibility of remote or hybrid work also meant some buyers were willing to move to vacation destinations full-time (e.g., living at the beach and telecommuting), effectively blurring the line between primary and second homes.
Quality of Life Relocations
The pandemic led many to reevaluate lifestyle. Families with school-age children considered school districts and suburban/rural settings where remote schooling might be easier (or where they could form learning pods). Some urban professionals sought out quieter neighborhoods or even “hobby farm” properties on Maryland’s Eastern Shore or in the western mountains, a trend realtors jokingly called the “Green Acres effect.”
Conversely, a minority of buyers returned to urban living by 2023, drawn by revitalization efforts and slightly softer city prices – for example, Baltimore City’s relatively flat prices made it a refuge for some who were priced out elsewhere. Overall, remote work expanded choices, but also meant housing markets in scenic or previously seasonal areas heated up as year-round demand increased.
Investment Property Dynamics
Remote work and the rise of platforms like Airbnb also influenced investor behavior. Maryland, with its beaches and mountains, saw a huge surge in investors buying short-term rental properties in 2020–21. Low interest rates made it attractive to purchase condos or houses in vacation markets and turn them into Airbnb rentals.
A Long & Foster agency report in 2021 noted “a huge surge in the number of investors buying Airbnbs” at the Delmarva beaches, taking advantage of the carryover of vacationers into the off-season and cheap financing. In more urban settings, investors also remained active – in Baltimore City, for instance, a significant share of rowhouse sales are to landlords or flippers targeting affordable properties to renovate.
However, by late 2022 and 2023, investor activity cooled somewhat as interest rates on investor loans climbed and home price growth slowed. In Baltimore, some investors began to retreat. This is positive for regular homebuyers in theory (less competition from cash investors), but in practice the overall shortage of starter homes remained a bigger hurdle.
Vacation and Investment Property Trends
While our focus is on primary residences, it’s worth noting the vacation home and investment property boom that occurred in Maryland during this period – and how it intersected with middle-income buyers. Vacation home sales surged during 2020–2021 across the U.S., and Maryland was no exception.
The National Association of Realtors reported that vacation home purchases jumped 57% year-over-year in 2021, rising to 6.7% of all existing-home sales (up from about 5% in 2019). In Maryland, the prime destinations were the Eastern Shore beach towns (Ocean City and Delaware beaches) and mountain/lake retreats in Western Maryland (Deep Creek Lake). These areas saw unprecedented demand from both out-of-state buyers and Maryland residents seizing the chance to own a getaway.
Notably, many buyers weren’t ultra-wealthy elites, but upper-middle-class households (often in the $100K–$200K income range, thus under $250K) who leveraged low mortgage rates to afford a second property. For example, a family in suburban Maryland might refinance their primary home at 2.8%, then use the equity and savings on interest to purchase a modest condo in Ocean City.
“Staycation” Homes and Extended Stays
With remote work, some vacation homes turned into semi-primary homes. Many people who bought beach homes during the pandemic ended up staying for much of the year, effectively becoming part-time or full-time residents rather than just occasional visitors. This created a “second season” in typically seasonal towns, as shops and restaurants saw more year-round activity. For buyers, it meant their second home doubled as a remote work site or even a future retirement home.
Price Surge in Vacation Markets
The influx of demand drove prices in vacation markets to record highs. Worcester County (Ocean City) saw its median vacation-home sale price jump 14% in 2020 alone. In Deep Creek Lake (Garrett County), lakefront and ski-area properties were snapped up quickly, reducing inventory and upping prices. This made it challenging for some local or more budget-conscious buyers to compete.
A household under $250K income could still purchase a small condo or cabin in these areas, but single-family vacation homes often moved out of reach by 2021. For instance, a cabin in Garrett County that might have sold for $350K in 2019 could easily fetch $450K+ by 2022 due to bidding wars from city buyers.
Second-Home Market Cooldown
By 2022, however, financing a second home or investment property became more expensive. Not only did mortgage rates rise, but Fannie Mae and Freddie Mac implemented higher fees for second-home mortgages in 2022, which added to borrowing costs. This cooled the investor frenzy.
Indeed, by 2023 national demand for vacation-home mortgages had plummeted – down more than 50% from pre-pandemic levels. Redfin reported that 2023 demand for second homes was at a 7-year low, as many such buyers hit pause due to high costs. In Maryland, beach markets saw a return to a more typical seasonal pattern and slightly longer time on market for second homes.
Homebuying Incentives for Budget-Conscious Buyers
For Maryland households earning under $250,000 (which includes the vast majority of first-time buyers and move-up buyers), affordability and financing are paramount. Several programs and incentives have been available from 2018 to 2023 to help these buyers purchase a home:
Maryland Mortgage Program
The flagship state program for first-time homebuyers is the Maryland Mortgage Program, administered by the Maryland Department of Housing and Community Development. MMP offers 30-year fixed-rate loans often at below-market interest rates, along with down payment and closing cost assistance.
For example, the 1st Time Advantage loan series provides eligible first-time buyers with the lowest interest rate available and can be paired with down payment assistance. MMP’s Flex programs offer forgivable or deferred-payment loans to cover down payments – e.g., “Flex 6000” gives $6,000 as a zero-interest second loan for down payment, and “Flex 3%” provides 3% of the loan amount as assistance.
These programs typically have income limits (varying by county and household size, but generally aimed at moderate-income households well under $250K/year) and purchase price limits. Many thousands of Maryland buyers used MMP products each year between 2018 and 2023, significantly lowering their upfront costs.
Local Government Assistance
In addition to state-level help, some counties and cities offer their own incentives. For instance, Baltimore City has multiple programs for homebuyers: “Buying Into Baltimore” offers $5,000 grants for those who purchase in city limits, and a City Employee Homeownership program gives municipal workers a $5,000 bonus if they buy in the city.
In Prince George’s County, the Pathway to Purchase program provides up to $10,000–$25,000 in down payment assistance for first-time buyers who take homeownership counseling and buy within the county. Montgomery County has had programs like the Montgomery Homeownership Program, which in some years provided a matching down payment loan (for example, $25,000) to first-time buyers in that high-cost county.
Federal Loan Programs
Buyers from 2018–2023 benefited from historically favorable federal mortgage programs. FHA loans, which allow as low as 3.5% down and more flexible credit, were widely used by Maryland buyers under $250K income. FHA’s loan limits in Maryland (around $420K in most counties as of 2021, higher in DC metro) kept pace with rising prices, enabling many to finance with minimal down payment.
VA loans (0% down for veterans) were also crucial, given Maryland’s large military and veteran population – VA loans soared in popularity thanks to low rates and no mortgage insurance requirement. The USDA Rural Housing loan (also 0% down) aided buyers in less urban parts of Maryland (yes, much of Harford, Carroll, southern Maryland, and the Eastern Shore qualify as “rural” for USDA purposes).
In summary, Maryland in 2018–2023 deployed a robust toolkit to assist homebuyers of modest means, recognizing the growing gap between home prices and incomes. These programs became increasingly vital as affordability worsened.
Conclusion: The New Market Reality
Maryland’s homebuying trends from 2018 to 2023 reflect a market that swung from hot to cold but never truly favored buyers, especially those on a budget. Low inventory and high demand drove up prices, benefiting those who owned homes but frustrating many would-be buyers.
Households earning under $250K found ways to navigate the market – from opting for townhouses or condos, to moving to less expensive areas, to leveraging assistance programs – yet affordability remains a pressing concern moving forward. Today’s issue is not a housing bubble fueled by risky loans, but a housing shortage coupled with affordability constraints.
As we head beyond 2023, Maryland’s “new normal” may be a slower pace of sales and continued pressure on prices until supply improves. Prospective buyers will need persistence and creativity, and policymakers will need to focus on increasing housing opportunities so that the dream of homeownership stays within reach for the next generation of Marylanders.
References
- Market Activity for Maryland Realtors® – (2022 Annual Housing Stats)
- Market Activity for Maryland Realtors® – (2023 Annual Housing Stats)
- Maryland Housing Beat
- Bright MLS Recaps 2023 Data Trends And Changes | SMAR®
- The reshuffling of Maryland and Delaware beach homebuyers – WTOP News
- Home Prices Up In MD: Here’s When They’re Expected To Peak
- Housing Statistics
- Baby Boomer Home Buying Trends in Maryland (2018–2023)
- Residential Sales Data – Maryland Department of Planning
- Demand For Vacation Homes Is Down More Than 50% From Pre-Pandemic Levels
- Our Programs – Maryland Mortgage Program
- Maryland First-Time Home Buyer | Programs & Grants
- Maryland First-Time Homebuyer Assistance Programs – Bankrate
- Homeownership Incentives | Baltimore City Department of Housing
- Pathway to Purchase | Prince George’s County
- Fact Sheet: Montgomery Homeownership Program VIII
- Maryland Income Statistics for 2024
- Charting Maryland’s Economic Competitiveness in 2024: Population & Migration — Maryland Chamber of Commerce
- Gov. Wes Moore on LinkedIn: Over the last 10 years, Maryland has underproduced housing
- Expanding Maryland’s Housing Stock: A Roadmap to Meeting Housing Targets
- U.S. Census Bureau QuickFacts: Maryland
