Real estate in Frederick, MD is changing. The real estate market throughout 2024 remained challenging for many prospective home buyers due to persistently high home prices and interest rates that did not decrease as much as many had hoped. Despite these ongoing challenges, specific regions such as Warren, Shenandoah, and Frederick counties experienced an uptick in home sales compared to the previous year. This contrasted with the broader national trend, where many areas continued to struggle.
The Effects on Buyers and Sellers
Throughout 2024, both potential buyers and current homeowners looking to sell experienced anxiety due to the rising interest rates. Jennifer Freer Avery, a real estate agent based in Front Royal, commented on the atmosphere, noting that the fear of increasing rates affected both sides of the market. Buyers were hesitant to commit to new mortgages, and sellers were concerned about finding affordable new properties after selling their current homes. This situation hit first-time home buyers particularly hard, as they struggled with the combination of high prices and elevated interest rates.
Challenges in the Mortgage Sector in Frederick, MD
John Cruz, who has been a branch manager at Century 21 Mortgage for over two decades, described 2024 as an especially difficult year for the mortgage industry. Interest rates mostly stayed around 6%, dramatically reducing the purchasing power of potential home buyers. Although there were moments when the rates seemed to lower slightly, these were often quickly reversed by new economic reports, such as those showing decreases in unemployment, which would push the rates back up. These fluctuations made it challenging for buyers to find opportune moments to secure lower mortgage rates.
Sales Trends and Market Activity
Despite the difficulties facing the market, many individuals who had opted out of purchasing homes in 2023 re-entered the market in 2024, leading to significant increases in home sales and property values in Frederick, Warren, and Shenandoah counties. According to Bright MLS market statistics, real estate agents in these areas reported substantial growth in sales volume compared to the previous year. This indicates that despite economic hurdles, fundamental life events such as marriages, divorces, and the need to be closer to family continued to drive people to participate in the real estate market.
Looking Forward: Predictions for 2025 in Frederick, MD
As we look towards 2025, the Virginia Association of Realtors has a cautiously optimistic outlook for the housing market, forecasting a modest improvement driven by strong demand and an increase in housing inventory. They predict a 2.6% increase in new housing starts and a 3.4% rise in median home prices. The organization also anticipates that housing markets near job centers will see renewed demand as more companies enforce return-to-office mandates. However, they expect mortgage rates to remain volatile, which could impact buyer affordability. The long-term strength of the real estate market will likely endure, driven by the basic economic principle of supply and demand, which suggests that housing prices will not decrease significantly in the short term.