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MARCH – APRIL 2005
Blueprint Maryland T H E STAT E ’ S H O U S I N G E CO N O MY I N R E V I E W VOLUME 2 ISSUE 3
Workforce Affordable Rental Housing Shortage in Maryland
T here is an acute shortage of workforce affordable
rental housing for families, seniors and individuals
with disabilities in Maryland. This shortage has become more
8 percent among households with 31-50 percent of the AMI,
and by only 1 percent for households in the 51-80 percent of
the AMI group. Among households with incomes below 30
concentrated among the low-income renter house-holds percent of the AMI, 70 percent reported at least one housing
despite improvements in income and housing conditions problem in 2000, while 54 percent paid more than 50 percent
across a broad range of income groups in the past decade. of their income for rent and utilities. The corresponding
figures for households with incomes between 31-50 percent
Statewide, household income grew from an average of the AMI are 68 percent and 13 percent, respectively. Finally,
of $36,016 in 1990 to $52,310 in 2000, an increase of 45 32 percent of the families earning between 51-80 percent
percent. The growth of household income was widespread of the AMI reported at least one housing problem, while 2
throughout Maryland, ranging from a low of 25 percent percent indicated severe housing problems.
for Baltimore City to a high of 47 percent for Worcester In Worcester County, 54.8 percent of the low income
County. This impressive growth of income, however, did households are cost burdened, the lowest rate in Maryland,
not significantly reduce the share of low-income renter while in Montgomery County, 74.2 percent are cost burdened,
households with housing problems. the highest rate (See table on page 2). A family is cost
During the 1990-2000 period, the share of Maryland burdened if it pays more than 30 percent of its income for
households with severe rent burden, i.e., payment for rent and rent. About 34.3 percent of Garrett County’s low income
utilities exceeds 50 percent of the family income, declined households are severely cost burdened, the lowest rate,
by only 2 percent among households with 0-30 percent of compared to Montgomery County’s 60.4 percent, the
the Area Median Income (AMI). The same share declined by highest rate.
...continues on page 2
contents
National Economic Digest
1 workforce affordable
rental housing shortage
in maryland U.S. Economic Growth Expands at a Revised Quicker Pace from 0.9 percent). Consumer spending, however, was revised
1 national economic digest The U.S. Bureau of Labor Statistics revised up the fourth slightly lower (4.2 percent from 4.6 percent), due mainly to
quarter real GDP growth rate to 3.8 percent from 3.1 downward revisions of durable goods spending. Finally, the
3 residential construction
percent, thereby confirming that the U.S. economy is GDP price index was revised up moderately from 2.0 percent
trends
advancing at a markedly above-trend pace. The faster pace to 2.1 percent.
5 mortgage rate trends
of the GDP growth was due mainly to a sharp upward
5 home sale trends revision of exports, i.e., a growth of 2.4 percent instead of Beige Book Points to an Expanding Economy
an earlier reported decline of 3.9 percent. Other upward The Fed’s Beige Book for the late-November to early-January
7 homeownership
affordability indices revisions included residential investment (up 2.1 percent period was generally consistent with solid economic
from 0.3 percent), fixed business investment (up 14 percent expansion across most regions and industries. Most
from 10.3 percent), inventory change (up 0.6 percent from districts reported that manufacturers plan to increase
0.4 percent), and government purchases (up 1.2 percent capital spending in 2005, in part spurred by replacement
...continues on back cover
This issue of Blueprint Maryland quantifies the shortage of workforce affordable rental housing
throughout Maryland communities. This issue was carefully analyzed in the final report of the
Governor’s Commission on Housing Policy. The Commission’s recommendations are practical,
Blueprint Maryland is published innovative solutions to our affordable housing shortage. I congratulate the Commission and the
monthly by the Maryland hundreds of others who participated in this endeavor. The lives of many Marylanders will be positively
Department of Housing and
Community Development impacted as a result of their commitment to address the difficult issues of affordable housing and
community revitalization. Please visit www.mdhousing.org to read the full report.
www.blueprintmaryland.com
– robert l. ehrlich, jr., Governor, State of Maryland
BLUEPRINT MARYLAND | T H E STAT E ’ S H O U S I N G E CO N O MY I N R E V I E W | MARCH – APRIL 2005
...Workforce Affordable Rental Housing from cover
In addition to the size and variation of household PROJECTED SHORTAGE OF WORKFORCE AFFORDABLE AND AVAILABLE RENTAL HOUSING
income overtime, the affordability problem depends IN MARYLAND JURISDICTIONS, 2014
on the supply side of the rental market, i.e., higher
% HOUSEHOLDS IN 2000 SHORTAGE OF AFFORDABLE UNITS
rates of growth in median rent and the slow growth of
50% of AMI Cost Severely Low Income
multi-family residential structures. The rental housing JURISDICTION Threshold (2000) Burdened Cost Burdened Families Seniors Disabled Total
supply, in turn, can be measured by units affordable Allegany $ 15,411 64.8% 44.2% 700 300 300 1,300
Anne Arundel 30,884 67.2% 54.7% 8,700 1,800 2,100 12,600
and available to a specific income threshold. Data from
Baltimore 15,039 66.9% 48.8% 13,200 4,600 4,600 22,400
the 2000 Census shows that about 87 rental-housing
Baltimore City 25,334 76.7% 63.5% 10,000 3,300 4,500 17,800
units were affordable for every 100 low-income renter
Calvert 32,973 69.9% 46.1% 900 200 200 1,300
households in Maryland. This represents a shortage Caroline 19,416 61.4% 38.9% 300 100 100 500
of 13 units per 100 renter households. However, many Carroll 30,011 70.4% 58.4% 1,900 500 500 2,900
units, nominally affordable to specific income groups, Cecil 25,255 67.7% 51.5% 1,300 300 400 2,000
are occupied by higher income households. In 1990 Charles 31,100 71.2% 47.0% 1,900 300 500 2,700
and in 2000 alike, about 46 percent of the affordable Dorchester 17,039 67.7% 48.6% 300 200 100 600
units, or 40 units per 100 low-income renters, were Frederick 30,138 69.1% 49.9% 3,300 700 800 4,800
occupied by higher income renter households. As a Garrett 16,119 55.9% 34.3% 200 100 100 400
result, only 47 affordable rental units were available per Harford 28,617 68.6% 54.4% 3,300 700 800 4,800
Source: Maryland Department of Housing and Community Development
Howard 37,084 66.1% 57.6% 6,700 900 1,100 8,700
100 low-income renter households in Maryland.
Kent 19,935 64.4% 48.4% 300 100 100 500
This study, conducted at the request of the
Montgomery 35,776 74.2% 60.4% 24,700 5,700 5,600 36,000
Governor’s Commission on Housing Policy, estimates
Prince George’s 27,628 73.8% 58.1% 19,200 3,300 5,100 27,600
the shortage of affordable and available rental housing Queen Anne’s 28,519 62.6% 43.4% 500 100 100 700
units for households who earn less than 50 percent of Somerset 14,952 73.0% 58.7% 200 100 100 400
the AMI and pay more than 30 percent of their income St. Mary’s 27,353 69.2% 46.3% 1,500 300 300 2,100
for rent. The Commission was established by Governor Talbot 21,766 71.5% 50.5% 500 200 100 800
Robert L. Ehrlich, Jr. through an executive order in Washington 20,309 65.8% 49.8% 1,800 600 700 3,100
March 2003 to develop new and innovative policies Wicomico 19,518 72.5% 56.9% 1,200 400 400 2,000
to expand home ownership, to ensure an ample Worcester 20,325 54.8% 41.0% 500 200 200 900
Maryland $ 26,155 70.0% 53.8% 103,100 25,000 28,800 156,900
supply of workforce housing, to address the needs
of seniors and individuals with disabilities, and to
enhance community revitalization activities to create
sustainable communities.
Since the median household income varies The disabled households are defined as families to grow by an additional 25 percent, reaching a high
widely across the state, the use of a single statewide with one or more disabled individual, where of 157,000 units by 2014. Our projections assume no
affordability threshold may distort the analysis as it disability, as defined by the 2000 Census, is a new workforce affordable rental housing production
represents a different share of the local median income. condition that makes it difficult for a person to do by the Maryland Department of Housing and
For example, in 2003, the statewide median family activities such as walking, climbing stairs, dressing, Community Development (DHCD) beyond 2005.
income threshold (50 percent), as reported by the U.S. bathing, learning, or remembering. The data include This allows us to estimate the impact of various
Census Bureau, was $26,155. This threshold represents non-institutionalized individuals over five years production scenarios and policy options on the
only 35 percent and 37 percent of the median of age who live in households and group quarters projected deficit. According to our analysis, low-
household income in Howard and Montgomery such as college dormitories, military quarters, and income family units account for the bulk of the
counties respectively. The corresponding figure for group homes. The disabled individuals (including projected deficit (103,100 units or 66 percent of the
Baltimore City is 87 percent. Thus, to account for these the elderly disabled) are converted to the disabled total), followed by units accessible to individuals with
variations, this study estimates the magnitude of the households using an average household size of disabilities (28,800 or 18 percent), and the elderly
rental housing shortage in Maryland by utilizing a about 2.2 persons per family. units (25,000 or 16 percent). Based on an estimated
different income threshold for each county. These local Baseline shortage of workforce affordable rental cost per unit of about $114,000 and incorporating
income thresholds are equivalent to 50 percent of each units for 2000 are based on the number of low future inflation, the estimated production cost of
county’s median household income. income families, elderly and disabled households meeting the expected 157,000 shortage of units over
To estimate the shortage of affordable housing for compared to the number of workforce affordable the next ten years is approximately $19.5 billion.
the state’s senior households, the elderly population rental units available to them. The shortage Montgomery County with 36,000 units has
had to be converted into elderly households. Our projections for 2014 are based on the forecast of the largest projected shortage, followed by Prince
conversion technique is based on the Census population growth. On average, the number of George’s County (27,600 units), Baltimore County
distribution of families (ranging in size from one low-income families and the disabled households (22,400 units), Baltimore City (17,800 units), Anne
person to four or more persons) headed by an will grow by about 0.8 percent a year during the Arundel County (12,600 Units), and Howard County
individual 65 years and older. According to the 2000 projection period. The corresponding figure for (8,700 units). With the exception of Garrett County,
Census, about 68.3 percent of senior families consist senior households is 2.0 percent a year. jurisdictions with the smallest projected shortage are
of one person, 26 percent consist of two persons, and In 2000, Maryland had a deficit of about located on the Eastern Shore of Maryland and include
the remaining 5.7 percent consist of three or more 125,000 affordable and available rental units. The Somerset, Caroline, Kent, Dorchester, Queen Anne’s,
individuals. rental housing shortage in Maryland is projected Talbot, and Worcester counties. ■
PAG E 2 BLUEPRINT MARYLAND | MARCH – APRIL 2005
Residential Construction Trends
The January construction
spending in the U.S. was up
Construction Spending Continues to Grow builders’ expectations of future home sales and the by 0.7 percent compared to
Construction spending in January was up 0.7 traffic of potential buyers, remained unchanged.
last month and by 11 percent
percent from last month and 11 percent from
January 2004. Private construction (both residential Mortgage Applications Index Edged Up
compared to January 2004.
and non-residential) increased by 0.6 percent The Mortgage Applications Index of the Mortgage
in January. Residential construction was up 0.4 Bankers Association, a volatile leading indicator of
percent, as spending on single-family and multi- home sales and refinancing, edged up 0.5 percent
family structures increased by 0.9 percent and 0.2 in February. The Index, however, declined by 5.5
percent, respectively. Nonresidential construction percent from February 2004. The purchase index
spending increased by 1.2 percent, while spending component declined by 0.07 percent from last
on public construction rose by 0.8 percent. The month, but gained 4 percent from February 2004.
gains in public construction spending were due to The refinancing application index component
increases in spending on educational facilities and increased by 1.2 percent, but declined by 35 percent
on transportation infrastructure by state and local compared to February 2004. The recent reading
governments. of the index suggests a decelerating demand for
mortgage loans and specifically for refinancing,
Housing Market Index Declines due to recent increases in variable mortgage rates.
The Housing Market Index (HMI) produced by the The average 30-year fixed mortgage rate declined
National Association of Home Builders, declined by to 5.63 percent in February, down eight basis points
two points to 68 in January, the lowest reading in from January and one basis point from February
the past five months. The decline was due to the 2004. On the other hand, the average one-year
softening in the builders’ view of current home sales, adjustable rate was 4.16 percent, up four basis
as the current sales component of the index declined points from January and 61 basis points from
by three points to 74. Other components of HMI, the February 2004.
The January building permits
issued in Maryland declined
by 23.6 percent to 1,525 units.
Single-family permits declined
RESIDENTIAL CONSTRUCTION – JANUARY 2005
by 12 percent to 1,373 units,
and multi-family permits
PERMITS STARTS COMPLETIONS
COUNTY Units $ Value (‘000s) Units $ Value (‘000s) Units $ Value (‘000s)
decreased by 65.1 percent to
Allegany 12 973 6 698 7 953 152 units.
Anne Arundel 169 23,030 222 26,541 211 24,762
Baltimore 84 10,106 251 21,168 97 13,258
Baltimore City 22 3,007 22 3,007 0 0
Calvert 53 9,090 53 9,090 30 4,674
Caroline 11 1,870 11 1,870 21 2,936
Carroll 51 7,209 145 13,384 55 7,560
Cecil 78 12,099 74 11,779 74 9,978
Source: U.S. Census Bureau & Maryland Department of Housing and Community Development
Charles 94 15,711 69 13,999 88 16,408
Dorchester 0 0 0 0 22 3,472
Frederick 79 9,503 79 9,503 122 14,369
Garrett 5 803 5 803 60 10,935
Harford 102 14,325 97 13,985 233 33,260
Howard 95 12,984 111 14,044 78 6,662
Kent 5 886 5 886 24 4,684
Montgomery 114 28,658 114 28,658 239 36,549
Prince George’s 234 41,253 234 41,253 128 15,202
Queen Anne’s 17 4,149 17 4,149 29 3,964
Somerset 3 422 12 1,044 12 1,053
St. Mary’s 73 9,272 68 8,906 108 13,497
Talbot 32 6,111 32 6,111 52 8,454
Washington 72 13,540 71 12,949 82 12,408
Wicomico 51 6,192 51 6,192 58 6,333
Worcester 69 7,488 59 6,851 139 14,892
Maryland 1,525 $ 238,682 1,808 $ 256,870 1,969 $ 266,263
...continues on page 4
BLUEPRINT MARYLAND | MARCH – APRIL 2005 PAG E 3
...Residential Building from page 3
RESIDENTIAL BUILDING PERMITS – ALL UNITS
Building Permits Down in the U.S. and Maryland
Percent Change from Same Month Previous Year
Source: U.S. Census Bureau & Maryland Department of Housing and
but up in the South Region
In January, the U.S. Census Bureau reported that
privately owned building permits in the U.S. declined
by 9.8 percent to 137,559 units. The decline in building
permits was broad based, as single-family permits
declined by 5.0 percent to 105,147 units and multi-
family permits declined by 22.3 percent to 32,412 units.
Compared to January 2004, however, both single-
Community Development
family and multi-family permits were up, as they
increased by 8.4 percent and 17.0 percent, respectively.
The January volume of building permits issued in
the South region increased by 5.3 percent to 74,400
units. The South region includes Maryland, Delaware,
Washington, D.C., Virginia, West Virginia, North
Carolina, South Carolina, Georgia, Florida, Alabama, Housing starts in Maryland declined by 20.5 percent in January 2005 to 1,808 units.
Mississippi, Tennessee, Kentucky, Louisiana, Arkansas Across product types, single-family housing starts declined by 12.0 percent to 1,373
and Texas. The region’s single-family and multi-family units, while multi-family starts decreased by 39.0 percent to 435 units.
permits were up, as they rose by 5.6 percent to 57,300
units and by 4.1 percent to 17,100 units, respectively.
Compared to January 2004, residential building
residential building permits issued for all units However, compared to January 2004, housing
permits issued in the South region increased by 18.4
declined by 13.4 percent, reflecting declines of 15.6 completions were up by 12.1 percent.
percent, as multi-family permits increased by 29.2
percent for multi-family units and 13.2 percent for In the South region, housing completions
percent and single-family permits rose by 15.5 percent.
single-family structures. declined by 27.1 percent to 60,700 units. Single-family
The January building permits issued in Maryland
completions declined by 30.3 percent to 48,900 units,
declined by 23.6 percent to 1,525 units. Single-family
Maryland Housing Starts Declined while the multi-family completions decreased by 9.9
permits declined by 12 percent to 1,373 units, and
Nationally, residential construction in January percent to 11,800 units. Similar to the national trend,
multi-family permits decreased by 65.1 percent to
grew by 4.6 percent to 141,000 units. Single-family housing completions in this region were up by 16.5
152 units. Compared to the same month last year,
construction increased by 1.8 percent to 113,000 units, percent compared to the January 2004 data.
while multi-family construction grew by 17.6 percent In Maryland, the number of housing units
to 28,000 units. Compared to the same month last completed declined by 27 percent to 1,969 units in
year, single-family and multi-family housing starts January. The single-family completions declined by
The January median sale were up by 17.2 percent and 12.0 percent, respectively. 18.2 percent to 1,779 units, while the multi-family
price of existing homes in Housing starts increased in the South region housing completions decreased by 63.7 percent to 190
by 27.2 percent to 81,000 units in January, as single- units. Compared to the same month last year, housing
Maryland was $251,984,
family construction rose by 32.1 percent, while multi- completions were down by 16.1 percent in Maryland.
down 2.4 percent from last family starts increased by 7.7 percent. Compared to
month, but up 16.3 percent January 2004, residential housing starts were up by Residential Construction Activity in
from January 2004. 28.4 percent, reflecting increases of 1.4 percent in the Maryland Counties
multi-family construction and 35.9 percent in the Across Maryland, the value of housing permits
single-family housing activity. in January declined by 11 percent to $239 million.
Housing starts in Maryland declined by 20.5 Maryland jurisdictions that reported gains in the
percent in January 2005 to 1,808 units. Across number and value of building permits issued for
product types, single-family housing starts declined this month included Allegany, Garrett, Harford,
by 12.0 percent to 1,373 units, while multi-family Howard, Prince George’s and St. Mary’s counties, and
starts decreased by 39.0 percent to 435 units. Baltimore City. Statewide, the value of housing starts
Compared to January 2004, housing starts were declined by 9.9 percent to $257 million in January
down by 13.6 percent in Maryland, due to declines 2005. Overall, six Maryland jurisdictions reported
of 13.2 percent in single-family and 15.0 percent in gains in the number and value of housing starts,
multi-family construction. including Allegany, Carroll, Garrett, Harford, Howard,
and Prince George’s counties. The value of housing
Housing Completions Down units completed in Maryland declined by 25 percent
The U.S. Census Bureau reported that in January, to $266 million in January. Maryland jurisdictions that
privately owned housing completions declined by reported gains in the number and value of housing
28.8 percent to 133,000 units, nationally. Across completions included Caroline, Garrett, Harford,
the nation, single-family and multi-family housing Montgomery, and Worcester counties. ■
completions declined by 31.5 percent to 111,300 units,
and by 10.7 percent to 21,700 units, respectively.
PAG E 4 BLUEPRINT MARYLAND | MARCH – APRIL 2005
Mortgage Rate Trends 30-YEAR FIXED MORTGAGE RATES
T he February effective 30-year fixed mortgage
Source: Freddie Mac & Maryland Department of Housing and
rates -- rates that account for variations in
points – declined in the U.S. and the South region,
but edged up in Maryland.
From January to February 2005, Freddie Mac’s 30-
year effective fixed mortgage rates dropped from
Community Development
5.77 percent to 5.70 percent in the U.S., and from
5.73 percent to 5.66 percent in the South region. In
Maryland, however, the rates increased from 5.53
percent in January to 5.62 percent in February. The
Maryland commercial fixed mortgage rate is now
eight basis points below the national rate.
The effective mortgage rate of the Community mortgage loans to eligible homebuyers through
Development Administration (CDA), an arm private lending institutions throughout the State.
of the Maryland Department of Housing The CDA’s effective rate is now 25 basis points below The effective mortgage rate of
and Community Development, stands at 5.37 the average effective commercial mortgage rates in CDA, an arm of the Maryland
percent. The CDA’s Maryland Mortgage Program Maryland, and 33 basis points below Freddie Mac’s
Department of Housing and
(www.morehouse4less.com) provides low-interest national average rate. ■
Community Development,
stands at 5.37 percent.
Home Sale Trends
New Home Sales up in January significantly higher than the January 2004 ratio of
inventory of existing homes available for sale dropped
According to the Census Bureau, new single- 3.8 months. Similarly, the number of new homes sold
from a low of 3.9 months last month to a record low
family home sales in the U.S. increased to 85,000 in Maryland increased to 1,231 units in January, up
of 3.7 months in January. The median price of existing
units in January, up 3.7 percent from last month’s 6.2 percent from last month, but down 12.3 percent
homes declined slightly to $189,000 in January, down
revised volume of 82,000, but down 4.5 percent compared to January 2004. The healthy gains in new
one percent from last month, but up 10.5 percent
from January 2004. Nationally, the inventory of home sales nationwide reflect the continuation of
from January 2004. Existing home sales in the South
new homes for sale increased to 440,000 units in strong demand for homes, as both adjustable and
region declined to 145,000 units, down 31.6 percent
January, representing a growth of 2.1 percent over fixed rate mortgages remain affordable.
from last month, but up 9 percent from January 2004.
last month and 17.0 percent over January 2004.
The January median price of existing homes declined
The supply of new homes for sale declined from a Existing Home Sales Declined Sharply in January
in the South region to $170,000, down 2.4 percent
five-year high of 5.3 months in December 2004 to Nationally, existing home sales declined to 380,000
from last month, but up 10.0 percent compared to
5.2 months in January. However, the January supply units in January, down 30.5 percent from last month,
January 2004.
ratio was significantly higher than the January 2004 but up 8.0 percent compared to January 2004. The
...continues on page 6
ratio of 4.2 months. The January median price of new
single-family homes was $199,400 in the U.S., down
13.2 percent from last month and 4.8 percent from
January 2004.
NEW HOME SALES
In the South region, 45,000 new single-family Percent Change from Same Month Previous Year
homes were sold in January, about 53 percent of all
Source: U.S. Census Bureau & Maryland Department of Housing and
new homes sold in the U.S. The region’s January new
home sales was up 12.5 percent from last month’s
revised volume of 40,000 units, but down 2.2
percent from January 2004. The region’s inventory
of new homes for sale increased to 207,000 units
in January, representing a growth of 3.5 percent
over last month and 18.3 percent over January 2004.
The supply of new homes for sale also declined
Community Development
in the South region, from a high of 5.0 months in
December 2004 to 4.6 months in January. Similar
to the national trend, the region’s supply ratio was
BLUEPRINT MARYLAND | MARCH – APRIL 2005 PAG E 5
...Home Sale Trends from page 5
The volume of existing home sales in Maryland EXISTING HOME SALES
Percent Change from Same Month Previous Year
declined sharply to 5,797 units in January, down 31.1
Source: U.S. Census Bureau & Maryland Association of Realtors
percent from last month, but up 7.3 percent from
January 2004. The inventory of existing homes
available for sale in Maryland was 1.5 months of
supply, representing an increase of 4.8 percent from
last month, but a decline of 34.3 percent from January
2004. The January supply of existing homes in
Maryland was, therefore, 2.2 months, or 59.5 percent,
below the national average rate. The median sale
price of existing homes in Maryland was $251,984 in
January, down 2.4 percent from last month, but up
16.3 percent from January 2004.
This month’s sharp decline in existing home sales
throughout the U.S. is due both to the softening of
HOUSING UNITS SOLD AND HOUSING UNITS INVENTORY – JANUARY 2005
demand and to seasonal variations. While it might
HOUSING UNITS SOLD HOUSING UNITS INVENTORY
be correct to assume that rising mortgage rates are
Current Change from Change From Current Months Change From Change From
partially responsible for the slower pace of housing COUNTY Month Last Year Last Month Inventory Supply Last Year Last Month
demand, the most likely explanation is the typical Allegany 49 63.3% -22.2% 198 4.0 -56.2% 0.6%
Anne Arundel 523 7.4% -32.3% 952 1.8 -32.5% 15.3%
slow down in the real estate market during the
Baltimore 707 9.6% -31.1% 910 1.3 -33.6% -2.2%
winter months. Our analysis of historical data also Baltimore City 744 5.2% -27.1% 1,227 1.6 -45.9% -8.7%
suggests that volatility in home sales during winter Calvert 81 0.0% -33.1% 257 3.2 -4.5% 16.7%
months is not that unusual. Caroline 32 14.3% -11.1% 144 4.5 -25.9% -12.9%
Carroll 128 -0.8% -37.9% 286 2.2 -34.3% 16.2%
Cecil 84 -1.2% -29.4% 306 3.6 -12.8% 7.6%
Charles 164 10.1% -33.9% 200 1.2 -26.1% 3.2%
This month’s sharp decline in existing Dorchester 26 -21.2% -54.4% 193 7.4 4.2% 96.8%
Frederick 258 13.7% -21.8% 377 1.5 -46.2% -13.0%
home sales throughout the U.S. is Garrett 32 77.8% -49.2% 297 9.3 -39.3% 63.8%
due both to the softening of demand Harford 203 -4.2% -35.8% 411 2.0 -18.4% -3.1%
and to seasonal variations Howard 263 10.0% -32.9% 328 1.2 -27.1% 2.9%
Kent 20 0.0% -44.4% 116 5.8 0.0% 49.1%
Montgomery 988 3.8% -33.8% 897 0.9 -29.3% 5.5%
Prince George’s 934 4.9% -31.4% 698 0.7 -55.8% 0.1%
Queen Anne’s 58 13.7% -21.6% 271 4.7 -28.4% 6.4%
Maryland Counties
Source: Maryland Association of Realtors
St. Mary’s 122 41.9% -14.7% 219 1.8 -19.6% -7.3%
In January, a total of 8,965 existing housing units Somerset 21 61.5% -8.7% 0 0.0 0.0% 0.0%
were available for sale throughout Maryland. Of Talbot 53 1.9% -3.6% 317 6.0 -15.0% -9.4%
that total, 5,797 units, or 65 percent of the inventory, Washington 141 42.4% -9.6% 361 2.6 -39.2% -15.4%
Wicomico 64 20.8% -37.9% 0 0.0 0.0% 0.0%
was sold in January, up 7.3 percent from last year,
Worcester 102 -11.3% -48.2% 0 0.0 0.0% 0.0%
but down 31.1 percent from the previous month. Maryland 5,797 7.3% -31.1% 8,965 1.5 -34.3% 4.8%
Montgomery County, with 988 units, and Kent County,
with 20 units had the highest and the lowest number
of home sales in Maryland. The January inventory of
existing homes was equal to 1.5 months of supply, up REAL ESTATE TRANSACTIONS – JANUARY 2005
4.8 percent from last month, but down 34.3 percent
from last year. Garrett County, with 9.3 months supply
of existing homes, had the highest supply ratio in
Maryland. The suburban counties of Montgomery and
Prince George’s counties recorded the lowest housing
supply of 0.9 and 0.7 months respectively. Other
counties with less than 2 months supply of existing
homes for sale include Charles and Howard counties
(1.2 months), Baltimore County (1.3 months), Frederick
Source: Maryland Association of Realtors
County (1.5 months), Baltimore City (1.6 months),
Anne Arundel and St. Mary’s counties (1.8 months).
Complete data are not available for Somerset,
Wicomico, and Worcester counties. ■
PAG E 6 BLUEPRINT MARYLAND | MARCH – APRIL 2005
Homeownership Affordability Indices
T he Maryland Homeownership Affordability
Indices for repeat and first-time homebuyers
provide a framework within which housing
both repeat and first-time homebuyers decreased by
2.4 percent to $251,984 and $214,186, respectively in
January. Effective 30-year mortgage rates fell from
affordability in Maryland counties and Baltimore a national average rate of 5.87 percent in December
City can be traced over time. 2004 to 5.77 percent in January 2005.
Across the state, Montgomery County had the
In January, the Maryland affordability index for highest median housing price of $369,925 for repeat
repeat buyers was 110, signifying the ability of a buyers and $314,436 for first-time buyers, up 15.6
typical repeat buyer to afford a house that is 10 percent from a year ago and essentially unchanged
percent more expensive than a median priced home. from the previous month. However, Talbot County
The January index for first-time buyers stood at 71, was the least affordable jurisdiction in Maryland
indicating that the typical first-time buyer could with homeownership affordability indices of 63
only afford a home priced 29 percent below the for repeat buyers and 41 for first-time buyers. The Homebuyers’ ability to buy
median priced home available to first-time buyers. median housing prices in Talbot County in January a median priced home in
Homebuyers’ ability to buy a median priced home were $360,000 for repeat buyers and $306,000 for
Maryland increased by 1.2
in Maryland increased in January as the statewide first-time buyers. Allegany County, on the other
percent in January, but
index was up 1.2 percent from December 2004, but hand, with the housing affordability indices of 250
down 17.3 percent compared to January 2004. The for repeat home buyers and 161 for first-timers
declined by 17.3 percent
increase in the affordability indices from last month was the most affordable jurisdiction in Maryland. compared to January 2004.
resulted from a modest reduction in home prices The median housing prices for Allegany County in
accompanied by a small drop in interest rates. The January were $65,900 for repeat buyers and $56,015
median sale price of existing homes available to for first-time buyers. ■
HOME SALE PRICES AND AFFORDABILITY INDICES – JANUARY 2005
MEDIAN HOME SALE PRICES HOUSING AFFORDABILITY INDICES
Current Month % Change From Current Month % Change From
Repeat First Time Repeat First Time
COUNTY Buyers Buyers Last Year Last Month Buyers Buyers Last Year Last Month
Allegany $ 65,900 $ 56,015 28.5% -5.9% 250 161 -18.2% 10.1%
Anne Arundel 300,000 255,000 22.4% 5.3% 112 72 -22.2% -10.7%
Baltimore 200,000 170,000 21.2% 0.0% 131 84 -15.3% 1.2%
Baltimore City 95,000 80,750 28.6% 5.6% 156 100 -15.5% 1.5%
Calvert 295,000 250,750 35.9% -5.6% 121 78 -31.2% -2.3%
Caroline 162,850 138,423 31.3% 1.8% 122 79 -20.2% 1.6%
Carroll 299,700 254,745 16.6% 5.2% 108 70 -16.1% -8.3%
Cecil 229,000 194,650 22.5% 1.8% 113 73 -23.7% -9.5%
Charles 273,950 232,858 31.1% -3.2% 120 77 -24.0% 1.5%
Dorchester 163,750 139,188 31.0% -9.0% 108 70 -23.4% 8.8%
Frederick 278,000 236,300 35.0% 2.0% 121 78 -24.4% -1.4%
Garrett 231,750 196,988 38.8% -33.8% 73 47 -19.6% 66.1%
Harford 209,000 177,650 18.1% 4.4% 145 94 -16.8% -7.2%
Source: Maryland Department of Housing and Community Development
Howard 335,000 284,750 24.1% 1.2% 117 75 -23.8% -7.9%
Kent 193,750 164,688 0.0% -29.3% 103 67 0.0% 53.1%
Montgomery 369,925 314,436 15.6% 0.0% 101 65 -14.2% -2.2%
Prince George’s 255,000 216,750 34.2% 2.0% 114 73 -24.8% -2.5%
Queen Anne’s 297,500 252,875 -9.6% -9.3% 104 67 10.5% 8.7% Existing home sales in
St. Mary’s 260,841 221,715 26.8% -4.6% 110 71 -17.2% 8.6%
Maryland declined sharply by
Somerset 88,000 74,800 10.0% -43.9% 174 112 -9.3% 75.5%
Talbot 360,000 306,000 22.6% 0.6% 63 41 -12.7% 4.8%
31.1 percent to 5,797 units in
Washington 175,000 148,750 6.1% -12.0% 125 81 3.5% 23.0% January, but increased by 7.3
Wicomico 143,000 121,550 0.0% -15.9% 139 89 2.7% 20.4% percent compared to the same
Worcester 310,000 263,500 4.4% -37.9% 71 45 1.1% 67.5%
month last year.
Maryland $ 251,984 $ 214,186 21.1% -2.4% 110 71 -17.3% 1.2%
BLUEPRINT MARYLAND | MARCH – APRIL 2005 PAG E 7
...Homeownership Affordability Indices from page 7
AFFORDABILITY INDEX FOR FIRST-TIME HOMEBUYERS – JANUARY 2005
Source: Maryland Department of Housing and Community Development
...National Economic Digest from cover
housing-related components made the largest contribution
demand. Residential real estate markets remain strong, but to the January Index. In particular, housing starts rose 4.7
several districts reported some moderation. House-price percent in January, a 21-year high. The Index’s employment-
appreciation is generally holding steady. Commercial and related component rebounded to +0.07 in January, from
industrial lending rose across most districts, consistent the December reading of -0.01. The rebound was due to maryland department of
with strong capital spending and inventory building. increases in average weekly and overtime hours for the housing and community
However, residential mortgage lending was sluggish, due to development
manufacturing sector, offsetting the weaker-than-average 100 Community Place
the continuing decline in refinancing activity. Labor markets job gain of 146,000. Crownsville, MD 21032
1-800-756-0119
continued to firm up in a number of districts, but wage
www.mdhousing.org
pressures were modest. Most districts reported only slightly Consumer Confidence Weakened in February
Robert L. Ehrlich, Jr.
higher price levels as inflation remains well contained. The Consumer Confidence Index of the Conference Board Governor
for February declined 1.1 points to 104, as consumers’ Michael S. Steele
Chicago Fed National Activity Index Up in January Lt. Governor
assessments of the future job markets declined by 5 points
Victor L. Hoskins
The Chicago Fed’s National Activity Index (CFNAI) for to 95.7. On the other hand, consumers’ assessments of Secretary
January posted above its historical trend reading of present conditions increased by 4.3 points to 116.4, as Shawn S. Karimian
Deputy Secretary
+0.29 for the 17th straight month, though considerably consumers became more optimistic about the current
below the December value of +0.59. The weakness was job situation. However, despite improving assessments Office of Research
due to a smaller contribution by the production-related Massoud Ahmadi, Director
of current conditions, consumers’ buying plans for major
Fereidoon Shahrokh, Deputy Director
indicators, from +0.36 in December to +0.01 in January. appliances significantly weakened in February. Similarly, the Eric Van De Verg, Senior Economist
Nevertheless, all four broad categories of indicators that Consumer Sentiment Index of the University of Michigan John Greiner, Senior Housing
comprise the index --production and income; employment, Policy Officer
declined by 1.3 points to 94.2 in February. The expectations
Luisa Fernandez, Research Economist
unemployment and hours; personal consumption and component of the Index declined by 2.3 points to 83.4, while
housing; and sales, orders and inventories-- made positive the present situation component remained unchanged Office of Geographic Analysis
and Mapping
contributions to the January CFNAI. The consumption and at 110.9. The two indices show that the consumers’ Jason Mielke, Director
expectations about the future job markets, income and Office of Legislative Affairs
The Chicago Fed’s National Activity Index the interest rates are the driving factors for consumer Jennifer Franks, Legislative Liasion
confidence and consumer spending. The anticipated
stood at +0.29 in January 2005, considerably
higher interest rates will reduce refinancing and future
below the December value of +0.59. The Blueprint Maryland is published
consumption expenditures. On the other hand, increases in monthly by the Maryland
lower index value for this month indicates Department of Housing and
job opportunities, due to an expanding economy and rising Community Development.
that the U.S. economy continues to expand,
incomes, will stimulate consumption, thereby offsetting the www.blueprintmaryland.com
although at a slower pace than in December. negative impacts from rising interest rates. ■
BLUEPRINT MARYLAND | T H E STAT E ’ S H O U S I N G E CO N O MY I N R E V I E W | MARCH – APRIL 2005
