Market Update · August 18, 2026 · 8 min read
Housing starts fell 12.4% in July. That's according to HousingWire, citing fresh Census data released today. Both single-family and multifamily construction slowed, more than analysts expected.
But here's the plot twist: permits rose 5%.
If you've been house-hunting in Harford County or Baltimore County this summer, you already know what tight inventory feels like. Fewer starts today mean fewer completed homes six to twelve months from now. And if permits are ticking up, builders are at least planning to build—eventually.
I spent twenty years in education before I became a Maryland realtor, so I can't help but teach this stuff. Let's break down what these numbers mean on the ground, why they matter to you whether you're buying or selling in Cecil, Anne Arundel, Montgomery, or any of the nine Maryland counties (plus DC, Pennsylvania, and Delaware) that I serve, and what I'm seeing in real time at open houses and kitchen tables.
When builders pull back, supply tightens. We've been running a housing deficit for years—Freddie Mac has documented it—and every month of slower construction makes that gap worse.
In Maryland specifically, we're caught between two pressures. On one side, mortgage rates that Freddie Mac pegged at 6.67% last week (down slightly from earlier in the month, but still high enough to sting). On the other, an ongoing mismatch between the number of people who want to buy and the number of homes available to buy.
New construction was supposed to ease that pinch. July's 12.4% drop says it isn't happening fast enough.
I talked about this a bit when rates ticked up last week—numbers only tell you so much. The feel of the market right now is that buyers are tired of waiting, sellers are holding tight unless they absolutely have to move, and builders are watching their margins get squeezed by labor costs and, frankly, uncertainty about where rates are headed next.
Permits are a forward-looking indicator. A builder files for a permit, waits for approval, lines up financing and subs, and then breaks ground. The 5% jump in permits is a signal that builders think conditions will improve—or at least stabilize—in the next few quarters.
But it's not immediate relief.
If you're a buyer in Howard County or Prince George's County waiting for more options, you're still facing the same slim pickings today. The permits issued in July won't turn into move-in-ready homes until mid- or late 2027 in many cases.
And if you're a seller? This data actually supports your hand a bit. Less new competition means resale homes—especially well-maintained ones in good school districts—stay in demand. I wrote recently about why Cecil County schools are making parents rethink their commute, and that same logic applies anywhere families are prioritizing stability and access over rock-bottom prices.
Gary Keller—founder of Keller Williams—told agents this week that the 30-year rate is hovering around 6.86%, home prices are up 5.4%, and existing-home sales are running at about 4.1 million annualized. Those are national numbers, but they track closely with what I'm seeing locally.
Rates dropped a hair recently (6.67% per Freddie Mac), and applications ticked up 3.6% as a result, HousingWire reported. But that same piece noted stress showing up in FHA and VA portfolios—borrowers stretching budgets, then struggling when life throws a curveball.
I'm not here to scare anyone. I am here to say: if your mortgage payment leaves you with no cushion, that's not a sustainable plan. I've sat across the table from too many families who bought at the top of their approval letter and then regretted it six months later when the furnace died or the car needed work.
If new construction stays slow and resale inventory stays tight (which it has been), affordability doesn't magically improve just because rates dip a quarter point.
Last weekend I held an open house in Harford County. Twelve groups came through. Four were serious. Two had been pre-approved for months and were still looking. One couple told me they'd seen forty-three homes since April.
Forty-three.
That's not because they're picky. It's because inventory in their price range—mid-$400s, three bedrooms, decent commute to Baltimore or Aberdeen Proving Ground—is just sparse. And when something decent hits the market, it goes under contract in days, sometimes with multiple offers.
Meanwhile, I've got listings in Anne Arundel and Charles County where we're seeing slower traffic but very motivated buyers. The $600K-plus market is a different animal right now—more negotiation, fewer bidding wars, longer days on market.
The data backs that up. Redfin reported that U.S. home prices rose just 0.27% month-over-month in July, essentially flat, but up 3.4% year-over-year. Not explosive growth, but steady. Rents, by the way, hit $1,962 nationally in July, according to Zillow, rising at the fastest pace in over a year. That math makes ownership look more attractive—if you can find something to buy.
I don't build homes, but I work with plenty of buyers who want new construction, and I hear from builders regularly. Right now they're dealing with:
A 12.4% drop in starts tells me builders are being cautious. The 5% jump in permits tells me they haven't given up.
For buyers, that means if you can lock in a pre-construction deal with a reputable builder in a good location—say, in York or Lancaster County in Pennsylvania, or New Castle County in Delaware—it might be worth exploring. Just make sure you understand the timeline and have a Plan B in case delivery stretches.
If you've been on the fence about listing, this data might actually help you decide.
Fewer new homes coming online means less competition for your resale property. Yes, buyer demand is softer than it was in 2021 or early 2022. But if your home is priced right, prepped well, and marketed to the buyers who are out there, you're not competing with a flood of shiny new construction down the street.
I walked through what sellers actually net after closing in a recent post, and the short version is: if your equity position is strong and your pricing is realistic, this is still a very workable market.
But "realistic" is key. Inventory has crept up slightly, and about 42% of listings in our region have seen at least one price cut. Overpricing in hopes of "testing the market" is a recipe for sitting.
Here's what I'd tell a client sitting at my kitchen table right now:
And if you're juggling all of this across state lines—say, you live in Maryland but work in Pennsylvania, or you're retiring from DC to Delaware—you're not alone. I'm licensed in all four jurisdictions for exactly that reason.
The Fed meets in September, and odds are shifting on whether they'll hike, hold, or (less likely) cut. Redfin noted that markets are waiting for clues from the Jackson Hole symposium later this week.
I'm not a fortune teller. But I do know this: housing policy, mortgage rates, and builder sentiment all move slower than headlines suggest. A single month of data—even a dramatic 12.4% drop—doesn't rewrite the story. It's one chapter.
The bigger story is that we still don't have enough homes, rates are still higher than most buyers want, and the people who are buying and selling right now are the ones who need to move, not the ones waiting for some magical perfect moment.
If you're one of those people, let's talk. You can see what's available right now or just reach out and we'll figure out what makes sense for your situation—whether that's in Baltimore City, Harford County, Anne Arundel, DC, York, Lancaster, or anywhere else I'm licensed to help.
Because the best time to buy or sell isn't when the data's perfect. It's when it's right for you.
Katrina Kirton Sherrod, REALTOR® · Samson Properties · Licensed in MD, DC, PA & DE · 443-616-9770 · Katrina@kkstherealtor.com
“The best time to buy a home was five years ago. The second best time is after we talk.” — Every honest realtor, eventually