High mortgage rates, rising prices and low inventory have limited home sales transactions throughout Maryland and the mid-Atlantic so far in 2023 as housing market activity is tracking closely to 2022 levels, according to the October Housing Report released Monday by Bright MLS, a North Bethesda-based multiple listing service.

Yet October showed the first signs of being similar to activity levels in 2022. New pending sales were only 3.2% lower than last year and some metros within the mid-Atlantic had more new pending sales, and even closed sales, than in October 2022.

In the Baltimore area, buyers persist despite facing near 8% mortgage rates. Low inventory keeps the market competitive, pushing prices to grow.

The number of active listings was virtually the same as it was a year ago and inventory has increased month-to-month for three consecutive months. Low inventory has led to a persistently competitive market and rising home prices.

The report shows a brisk market in the Baltimore area as the supply remains very low by historic standards. Houses are selling quickly, with the median days on market of just nine in October.

The median sales price in the region was $369,000, up 7% compared to a year ago, the fastest annual price growth since September 2022. Prices fell seasonally between September and October.

Sales activity is still lower than last year, but the gap has narrowed. In October, there were 2,633 new pending sales across the Baltimore metro area, down 7.3% compared to last October, the smallest year-over-year difference this year.

In the Maryland suburbs of Washington, market activity isn’t able to sustain the pace of last year as mortgage rates move closer to 8%, the report shows. However, prices continue to make gains as low inventory fosters competition for buyers searching for a home.

There were 3,752 new pending sales in the area, which is 136 fewer pendings than there were in September. Pending sales activity is 9.2% lower than a year ago. However, the gap between 2022 and 2023 monthly pending sales is at its lowest level of the year.

However, even though activity is constrained, prices are still rising and homes are still selling quickly. The median days on market in October was nine, which is nearly a week faster than last October.

The median price in October was $568,000. The median price is 3.3% higher than a year ago and is also up 3.3% compared to a month ago. Home prices peaked during the summer, which is a typical seasonal pattern. However, prices have been up year-over-year for five consecutive months.

New listings remain limited. There were 4,460 new listings coming onto the market in October, down 20.3% compared to last year. New listing activity was also down from September.

Overall, mid-Atlantic inventory remains at a deficit compared to the number of homes on the market last year. The 34,415 active listings available at the end of October 2023 were 6% less than the number in October 2022. Inventory has been improving since the summer and gains throughout the winter could help buyers persisting in the market have more choices, or provide opportunity for buyers who may bide their time until spring.

Whether buyers purchase now or wait until the new year, the market will be competitive, the report shows. Half of the homes sold in the mid-Atlantic in October were only on the market 10 days or less before being scooped up by an interested buyer. While there’s been a little relief since the June, the swift pace of buying hasn’t returned to pre-pandemic norms keeping buyers on their toes.

In October, the median sale price in the mid-Atlantic region was $381,000. Though declining from the summer, the median price is up 4.7% compared to a year ago. The seasonal easing won’t likely impact the monthly payment enough to entice buyers. Lower mortgage rates on the other hand could make a difference to the bottom line.

And looking into 2024, the consensus is that mortgage rates will begin to come down. Mortgage rates will remain well above 6% forcing consumers to reset their expectations and understand that 3% aren’t coming back. Still, rates moving back towards 7% and below will encourage more activity from both buyers and sellers suggesting a blooming spring market in the mid-Atlantic.