MD & DC Metro Residential Real Estate Update
Mortgage rates finally gave buyers a little relief this week.
The key word is little.
The average 30-year fixed mortgage rate declined from 7.40% to 7.32%, ending the recent stretch of rising or flat rates.
But buyers didn’t exactly storm back into the market.
Purchase mortgage applications actually fell 7% from the previous week and were 18% below the same period last year.
Meanwhile, active housing inventory grew 7.7% nationally, the fastest year-over-year weekly growth we’ve seen since late January.
That’s the real story this week:
Mortgage rates improved slightly, but not enough to solve the affordability problem.
As a result, buyers who can make the numbers work are walking into a market with more choices, less urgency and increasingly motivated competition among sellers.
Market Theme #1: Mortgage Rates Finally Move Lower
After climbing rapidly through September and early October, mortgage rates finally moved in the other direction.
Freddie Mac reported the average 30-year fixed mortgage rate at 7.32% as of October 22, down from 7.40% the previous week.
The average 15-year fixed rate declined from 6.71% to 6.68%.
Here’s the recent progression:
- September 10: 6.76%
- September 24: 7.03%
- October 1: 7.28%
- October 8: 7.40%
- October 15: 7.40%
- October 22: 7.32%
So yes, rates came down.
But perspective matters.
One year ago, the average 30-year rate was 6.19%.
Today’s buyer is still borrowing money at a rate more than a full percentage point higher.
That’s why an eight-basis-point improvement isn’t suddenly unlocking the market.
It’s relief.
It’s just not a rescue.
Market Theme #2: Buyers Didn’t Respond to the Lower Rates
This may be the most important number of the week.
The Mortgage Bankers Association reported total mortgage applications fell 5.3% during the week ending October 16.
More importantly for the housing market:
Purchase applications fell 7% from the previous week and were 18% below the same week last year.
Refinance applications declined 2% and remained 59% below last year.
MBA specifically pointed to the higher-rate environment as a major reason the fall housing market has cooled.
That tells us something important.
The market’s problem isn’t that people suddenly stopped wanting homes.
The problem is that the monthly payment has become difficult for many of them to justify.
There’s plenty of desire.
Affordability is the bouncer standing at the door.
Market Theme #3: Inventory Growth Accelerates to 7.7%
While buyers remain cautious, available inventory keeps growing.
Realtor.com’s latest weekly report shows active inventory 7.7% higher than a year ago.
That’s the fastest weekly year-over-year inventory growth since late January.
And look at how quickly this has changed.
Inventory growth was roughly 4% in late August.
By October 10 it had reached 6.8%.
Now it’s 7.7%.
But there’s a fascinating wrinkle.
Market Theme #4: Sellers Aren’t Flooding the Market
You might assume rising inventory means homeowners are suddenly rushing to list.
They’re not.
New listings were actually 5.1% LOWER than last year during the latest reporting week.
And they’ve now fallen by at least 4% year over year during each of the first three reporting weeks of October.
So why is inventory growing?
Because homes already on the market aren’t being absorbed quickly enough.
Inventory is accumulating.
That is very different from a flood of new sellers.
Higher mortgage rates have discouraged buyers.
But they’ve also discouraged existing homeowners—many of whom have much lower mortgage rates—from moving.
Both sides are hesitating.
The difference is that unsold homes don’t disappear.
They accumulate.
Market Theme #5: Asking Prices Continue Adjusting
The national median listing price remained approximately:
$415,000
That’s 2.1% below last year.
Median asking prices have now declined at least 2% year over year during all three October reporting weeks.
And they’ve been negative year over year for 40 consecutive weeks.
Median price per square foot also declined 1.4%.
Again, an important caution:
Median listing price isn’t the same thing as home-value appreciation.
Changes in the mix of properties listed can influence the median.
But the trend still tells us something useful.
Sellers are increasingly competing for financially constrained buyers.
Market Theme #6: Here’s the Surprise—Homes Aren’t Taking Longer Nationally
This week’s data includes an interesting contradiction.
National inventory is growing rapidly.
Buyer activity is weak.
Asking prices are declining.
Yet median days on market were approximately 62 days—the same as last year.
In fact, homes have sold at the same pace or faster than the previous year for 21 consecutive weeks.
How can that happen?
Because the market isn’t equally weak everywhere—or for every property.
Correctly priced, desirable homes can still sell.
Overpriced or compromised properties accumulate.
That’s increasingly creating two housing markets operating simultaneously:
Market A
Well-priced, well-prepared homes that buyers want.
Market B
Everything buyers believe they can wait on.
Guess which market sellers want to be in.
What About Maryland?
Maryland remains somewhat different from the national picture.
The latest published statewide Maryland REALTORS® report remains August.
That report showed:
- Closed sales: -8.5% YoY
- Pending sales: -1.0%
- New listings: -23.6%
- Active inventory: -13.7%
- Median sale price: +2.3% to $445,000
So while national inventory is increasing, Maryland’s most recently published statewide figures show continued supply constraints.
That’s one reason we need to be careful saying:
“Inventory is up.”
Where?
Nationally? Yes.
Across the broader Washington metro? Yes.
Across Maryland statewide in the latest published report? No.
Real estate isn’t national.
It’s not even statewide.
Ultimately, it’s the competition surrounding the house you’re buying or selling.
Local Market Snapshot
Rockville
Rockville remains supported by Metro access, employment, established neighborhoods and amenities.
But higher mortgage rates make buyers more sensitive to the difference between want and value.
Sellers need to know not only what recently sold, but what buyers can choose from today.
North Potomac
Limited turnover continues helping desirable North Potomac detached homes.
But buyers in higher price ranges are scrutinizing renovation costs.
A $1 million house needing $150,000 worth of work isn’t really a $1 million decision.
Buyers know that.
Gaithersburg
Gaithersburg’s variety of housing types gives buyers more opportunities to comparison shop.
That makes preparation and condition increasingly important.
Turnkey properties can separate themselves from competing inventory.
Silver Spring
Silver Spring remains a collection of micro-markets.
Metro proximity, neighborhood, housing type and condition can create very different results.
This is where broad market headlines become particularly dangerous.
Potomac
Luxury buyers tend to have options.
And options create patience.
Premium pricing can still work, but only when the property provides a premium reason for it.
Germantown
Germantown’s relative affordability becomes more valuable as mortgage rates remain above 7%.
Buyers trying to preserve monthly purchasing power may expand farther north within Montgomery County.
Olney
Limited turnover continues supporting desirable Olney neighborhoods.
But buyers are increasingly discriminating between move-in-ready properties and homes requiring substantial improvements.
Damascus
Damascus remains attractive for buyers seeking detached homes, space and value.
At today’s mortgage rates, getting more house for the purchase price becomes increasingly meaningful.
Frederick County
Frederick continues offering an affordability alternative to Montgomery County.
But buyers now have more inventory throughout the broader Washington region.
That means Frederick sellers still need to compete.
Prince George’s County
Relative affordability remains one of Prince George’s County’s strongest advantages.
Properties accumulating market time can offer buyers negotiating opportunities—especially where the original asking price was aggressive.
Howard County
Howard County remains supported by established communities, schools, employment access and its location between Washington and Baltimore.
Correctly priced turnkey properties can still behave very differently from dated or overpriced inventory.
Washington, DC
DC remains one of the more buyer-friendly portions of our regional market.
Longer marketing periods and more competing inventory can create genuine negotiating opportunities.
Condo buyers should continue evaluating much more than purchase price:
- Condo fees
- Reserves
- Special assessments
- Insurance
- Building condition
- Litigation
- Competing inventory
- Days on market
Sometimes the best deal isn’t the property with the lowest price.
It’s the property with the fewest expensive surprises.
What This Means for Buyers
Here’s the opportunity hiding inside this week’s numbers:
A lot of your competition is sitting on the sidelines.
Purchase mortgage applications are 18% below last year.
Inventory is increasing.
Asking prices are softening.
Sellers with properties that have been sitting may be increasingly willing to negotiate.
Yes, 7.32% mortgage rates hurt.
But don’t automatically assume waiting is the better financial strategy.
If rates eventually decline, more buyers may return.
More buyers can mean more competition.
Instead, evaluate the opportunity that’s actually available today.
Can you negotiate:
- Purchase price?
- Seller-paid closing costs?
- Rate buydown?
- Repairs?
- Inspection protections?
- Settlement timing?
Sometimes buying in a slower market at a higher rate—and refinancing later if rates fall—can produce a better overall outcome than waiting for lower rates and competing against ten other buyers.
That’s not universally true.
Run the numbers.
What This Means for Sellers
Don’t read “inventory is increasing” and panic.
Read it as a warning to execute well.
Buyers still purchase homes.
They’re simply becoming more selective.
That means the fundamentals matter:
- Price accurately
- Prepare properly
- Repair obvious defects
- Stage thoughtfully
- Photograph professionally
- Market aggressively
- Make showings easy
- Respond to feedback
Your goal isn’t to convince every buyer your house is wonderful.
Your goal is to make the right buyer believe:
“Of everything I’ve seen, this one makes the most sense.”
That’s how houses sell in a selective market.
5 Practical Takeaways
1. Mortgage rates finally declined
The average 30-year fixed rate moved from 7.40% to 7.32%.
2. Buyers didn’t respond yet
Purchase mortgage applications fell 7% for the week and 18% year over year.
3. Inventory growth accelerated
Active inventory increased 7.7% nationally, the strongest weekly growth since late January.
4. New sellers are actually declining
New listings fell 5.1%, confirming that inventory growth is being driven largely by unsold listings accumulating.
5. The best homes can still move
Despite higher inventory, national median days on market remained 62 days—unchanged from last year.
Bottom Line
This week’s market tells us something important.
Lower rates alone won’t fix housing affordability.
Mortgage rates finally moved down.
Buyer activity moved down too.
Meanwhile, inventory continued moving up.
That’s giving financially prepared buyers an unusual opportunity:
Less competition + more inventory + more seller motivation.
For sellers, it creates the opposite challenge.
Being listed isn’t enough.
You need to be chosen.
That’s why pricing, preparation and property-specific strategy matter so much right now.
Last week’s message was that buyers were gaining time.
This week’s message goes one step further:
Some buyers may now have an opportunity precisely because everybody else is waiting.
That’s worth paying attention to.
Sources & Reference Links
Freddie Mac’s October 22 Primary Mortgage Market Survey reported a 7.32% average 30-year fixed mortgage rate, down from 7.40% the previous week, and a 6.68% average 15-year rate.
Realtor.com’s October 22 Weekly Housing Trends report showed active inventory 7.7% above last year, new listings down 5.1%, a $415,000 median listing price, and 62 median days on market.
The Mortgage Bankers Association’s October 21 Weekly Applications Survey reported overall applications down 5.3%, purchase applications down 7% for the week and 18% year over year.
The latest published Maryland REALTORS® statewide report remains August 2026 and showed 5,582 closed sales, a $445,000 median sale price and continued statewide inventory constraints.
Different housing-data providers use different geographic boundaries and methodologies. Maryland statewide, Washington metro, Montgomery County, Washington DC and national statistics should therefore be interpreted independently rather than combined as though they represent identical markets. Local city observations above are professional interpretations of broader county and regional trends unless a specific city-level statistic is expressly identified.
“Alex Saenger and the Saenger Group are Top 1% Maryland Real Estate Agents serving the Washington DC Metro area. We are licensed Realtors based in Rockville, MD at Century 21 New Millenium.”
