2025 Mid-Atlantic Housing Market Outlook

The 2024 housing market did not play out as expected, with slower-than-anticipated sales activity and much faster home price growth. Mortgage rates remained higher for longer and inventory stayed tight, which suppressed some home sales. Affordability became a bigger challenge for homebuyers throughout the year. However, despite those affordability challenges and persistently high mortgage rates, home prices across much of the Mid-Atlantic rose quickly in 2024.?

The picture for the housing market in 2025 is changing, though the path forward is not necessarily clear. There are positive signs that transaction activity will be higher in 2025; however, there are some challenges. In addition, the 2025 Mid-Atlantic housing market will be characterized by different drivers in different markets, with some regions outperforming others.

Home Sales Stronger in 2025—But There Are Headwinds

Through much of 2024, home sales in the Bright MLS service area have been tracking at or slightly below 2023 levels. A bump in closed sales and pending sales in October suggests a relatively strong end to the year, finishing 2024 with a total of 221,786 home sales across the Bright MLS service area, a 1.8% increase from 2023.

There is significant pent-up demand in the market, as buyers were sidelined in 2024 by higher-than-expected mortgage rates. There is also pent-up supply, as would-be sellers have been also waiting for mortgage rates to drop before listing their home for sale.

While mortgage rates are expected to fall in 2025 [link to US forecasts], rates are likely to be volatile in the coming year. In addition, there is a possibility of economic uncertainty growing in the coming year, and some individuals and families are going to feel less financially secure.

We are forecasting a total of 237,963 sales in the Bright MLS service area in 2025, which is up 7.5% from 2024. Sales are still tracking below long-term averages, with 2025 sales activity projected to be 83% of 2019 sales. (In 2024, sales were just 77% of 2019 levels.)

Local outlook

There is projected to be more home sales in 2025 across all local markets in the Bright MLS service area; however, some markets will see more activity than others.

Bigger metros will likely see faster increases in sales activity in 2025, as more companies call workers back to the office and proximity to employment centers becomes more important. For example, sales activity in 2025 in the Baltimore and Washington, D.C., metro areas is expected to grow more quickly than in some other smaller markets in the Bright MLS service area.

Markets that tend to attract retirees are also poised for strong sales growth in 2025. The Del/Mar Coastal region is expected to see a 9.1% increase in sales between 2024 and 2025, which reflects not only demand from current residents, but also continued strong interest from retirees.

More Choices for Buyers in 2025, But Inventory Still Relatively Low in Most Markets

Inventory has been climbing in 2024, rising from the historic lows of the pandemic era. The forecast is for continued steady growth in supply through the end of 2024, with a total of 31,868 active listings at year’s end, up 15.5% over 2023.

In 2025, these forecasts suggest that inventory will continue to grow, as changing financial and family circumstances lead more homeowners to list their home for sale. There is projected to be 36,463 active listings at the end of 2025, or up 14.4% compared to 2024. While inventory has been increasing, it is expected that supply will still be at just 73% of the 2019 year-end level.

Inventory is expected to expand across the Bright MLS service area. Year-end inventory increases if the number of new listings coming onto the market increases or if new contract activity is relatively slow, or both. Markets with the fastest inventory growth in 2025 are expected to be those with significant pent-up supply, as well as those with more subdued demand—including places with more moderate-income households. For example, the Maryland/West Virginia Panhandle and Southern Maryland markets are expected to gain inventory more quickly than other markets, rising by around 20% in 2025. Second and vacation home markets, including the Del/Mar Coastal market, are also expected to have relatively faster inventory growth in 2025.

More Inventory Brings Slower Price Growth Across the Region, No Major Price Drops Expected

Home prices have been rising quickly throughout the Bright MLS service area. The median home price in 2024 is expected to be $409,320, up 6.3% compared to 2023. For the region overall, the median sold price is now 43% higher than it was in 2019, with some variation across markets.

There will be more supply coming onto the market in 2025. Although supply will still be relatively tight in many local markets, buyers are going to have more choices and will have more leverage in 2025. Home prices are still going to increase in the year ahead, but sellers will have to re-set expectations about multiple offers and offers above list. In 2025, the median sold price in the Bright MLS service area overall is projected to be $425,860, a 4.0% increase.

Affordability is a major constraint in the market heading into 2025, with many buyers having hit their affordability ceilings. As mortgage rates fall in 2025, more buyers will have room to make higher offers. However, rates are not going to fall significantly, and economic volatility is going to leave some prospective homebuyers—particularly those with more moderate incomes—uncertain about their own financial situations.

Higher-priced markets in the Bright MLS service area are expected to see faster price growth than more moderately priced markets, as higher-income buyers are going to be better positioned in 2025. Home prices are expected to rise by more than 4% in the Mid-Atlantic’s three major metro areas: Philadelphia, Baltimore, and Washington, D.C. The slowest price growth will be in the markets where inventory is expected to grow the fastest and where existing home demand has cooled. There is no regional market in the Bright MLS service area where home prices are expected fall in 2025.