Market Update · August 18, 2026 · 8 min read
I spent last Saturday at an open house in Harford County. Nice four-bedroom new construction, builder incentives everywhere—rate buydown to 5.9%, $10K toward closing, even a finished basement thrown in. The builder's rep was friendly, but I could see the math behind her smile. They're managing inventory like a tightrope walker manages balance.
HousingWire reported today that single-family housing starts dropped to an 808,000 annual pace in July. That's meaningful. But here's the part that matters for my buyers in Cecil, Baltimore, Howard, and Anne Arundel Counties: the builders aren't stopping because demand dried up. They're stopping because the cost of construction financing hit 12.59% for acquisition, development, and construction loans, according to the National Association of Home Builders.
Let me translate that. When a builder borrows money to break ground, they're paying almost double what you're paying on a mortgage. So they've gotten very, very careful about how many homes they start.
Meanwhile, Freddie Mac's latest survey pegs the 30-year fixed rate at 6.67% as of August 13th. That's up from where we were a few weeks ago, and Mortgage News Daily noted that rates have climbed three days straight this week despite some improvement in the bond market.
So we've got a weird pinch. Builders slow down because their money costs too much. Buyers hesitate because their money costs too much. And inventory—the thing everyone in Maryland, DC, Pennsylvania, and Delaware keeps asking me about—stays tight.
I wrote last week about how housing starts dropped in July, and the follow-up data today confirms the trend isn't a blip.
HousingWire ran a headline today that made me laugh, then sigh: "This is why the US doesn't have a housing shortage." The argument hinges on builders using buydowns and incentives to manage supply carefully.
Maybe that's true nationally. But try telling a first-time buyer in Prince George's County or York County, Pennsylvania, that there's no shortage. Last month I had a client lose out on three townhomes in a row—all in Montgomery County—because even with rates near 7%, there were still multiple offers on anything priced under $400K.
The "shortage" isn't just about total units. It's about where those units are, what they cost, and who can actually afford them at today's rates. A builder in Florida slowing down production because their margins are tight doesn't help a young teacher trying to buy near Bel Air or a federal employee hunting in Charles County.
I'm licensed across four jurisdictions—Maryland, DC, Pennsylvania, and Delaware—and the story is pretty consistent everywhere. Builders are cautious. Buyers are cautious. Sellers with existing homes are staying put because moving up means trading a 3.5% mortgage for a 6.67% one.
Redfin reported that U.S. home prices rose just 0.27% month-over-month in July, basically flat. But year-over-year, prices are still up 3.4%—the fastest annual growth in a year. So we're not seeing a crash. We're seeing a slow grind higher, with inventory staying stubbornly low.
In the counties I serve—Harford, Cecil, Baltimore, Howard, Anne Arundel, Montgomery, Charles in Maryland; Prince George's; DC proper; York and Lancaster in Pennsylvania; New Castle in Delaware—the pattern is the same. Listings that are priced right move. Listings that aren't sit and get cut. I've seen that inventory creep up slightly with more price reductions over the past few weeks, but it's nothing like a true buyer's market.
If you're thinking about renting instead of buying, the news isn't much better. Zillow's July rent report shows the typical U.S. rent hit $1,962, rising at the fastest pace in over a year. Demand is strong, supply is narrowing, and nearly two in five rental listings still offer some kind of concession—yet rents keep climbing.
I had a couple in Baltimore City run the numbers last month: $2,100/month rent versus a $2,400/month mortgage payment (taxes and insurance included) on a $350K rowhome. They went with the purchase. Even at 6.67%, the math tilted toward ownership because at least the mortgage builds equity and the rate is fixed. Rent just resets higher every year.
Here's the silver lining. Builders are motivated. They've got inventory they need to move, and they've got access to tools you and I don't—like buying down your rate for the first few years or covering a chunk of closing costs.
Last month I walked a buyer through a new build in Howard County. The builder offered a 2-1 buydown: 4.67% year one, 5.67% year two, then 6.67% for the remaining term. That first-year savings was enough to make the monthly payment feel manageable while my client settled into the home and (hopefully) positioned for a refinance if rates drop in 2027.
But you have to ask. And you have to compare the "sale price" after incentives to the market. Sometimes a builder inflates the price and gives you a buydown that sounds generous but costs you in appraisal gaps or resale value. I've seen it happen in Baltimore County and Anne Arundel County more than once.
If you're shopping new construction in Maryland, DC, Pennsylvania, or Delaware, bring someone who can read the fine print. That's my old educator brain talking—I spent two decades teaching people to ask the next question.
If you're serious about buying in the next six months, here's my advice:
Get pre-approved at today's rate. Don't wait for some magical drop to 5%. Zillow forecasts rates will only fall to around 6.5% by year-end, and the Fed's next moves are still uncertain. Mortgage News Daily mentioned the Jackson Hole symposium later this week could shift the odds of another rate hike in September. Lock in your budget now so you're not guessing.
Look at new construction with real scrutiny. Builders are offering deals, but not all deals are created equal. Compare the net cost after incentives to resale homes in the same area. I've got listings across all my markets—sometimes the better value is the three-year-old home two streets over.
Consider the counties you've been ignoring. I love Harford and Cecil Counties for this exact reason. You get more space, better schools in many cases (I wrote about why Cecil County schools make parents rethink their commute), and prices that don't make you want to cry. Yes, the commute to DC or Baltimore is longer. But hybrid work is still a thing for a lot of my clients, and an extra twenty minutes in the car can save you $100K on purchase price.
Don't sleep on the numbers. If you're selling to buy, you need to know what you'll actually net after closing. The new commission landscape post-settlement means some sellers are surprised by what walks away from the table. Do the math early.
If you're thinking about listing, this is still a decent time in Maryland, DC, Pennsylvania, and Delaware—if you price it right. The days of throwing any home on the market and watching a bidding war erupt are mostly over, especially in the middle and lower price tiers.
But there are still eager buyers out there. I've got families who've been looking since spring and are ready to move if the right home shows up. The key is pricing at market, not 5% above it hoping someone bites.
And if you've been sitting on the sidelines because you're nervous about buying your next place at 6.67%, let's talk. There are strategies—bridge loans, rent-backs, builder incentives on your next purchase—that can make the move less painful than you think. Sometimes it's just about talking through the scenarios with someone who's done this a few hundred times.
The housing market in Maryland and the broader mid-Atlantic isn't frozen. It's just tight. Builders are pulling back because financing is expensive. Buyers are choosy because rates are high. Sellers are reluctant because moving means giving up a low rate.
But people still need to move. Jobs change, families grow, life happens. So homes are selling—just more slowly, and with more negotiation than we saw in 2021 or early 2025.
If you're trying to make sense of headlines that say "no shortage" while you're losing out on every starter home in Baltimore County, you're not crazy. The national narrative and the local reality don't always match. That's why working with a Maryland realtor who actually knows these counties—and DC, Pennsylvania, and Delaware, in my case—matters more now than it did when the market was on fire.
I still love this job because I get to teach people how to read the market, not just react to it. And right now, the market is saying: be patient, be smart, and know your numbers.
Because at 6.67% with builders slowing down and inventory still tight, the buyer who wins is the one who shows up prepared.
Katrina Kirton Sherrod, REALTOR® · Samson Properties · Licensed in MD, DC, PA & DE · 443-616-9770 · Katrina@kkstherealtor.com
“Home is the nicest word there is.” — Laura Ingalls Wilder