What’s Ahead for Southern Frederick County Real Estate (2025–2026)

If you’ve owned your home for a while, especially in places like Ijamsville, Monrovia, or Urbana, you’ve probably seen a lot of changes in the market. And with interest rates, property values, and local development all shifting again, many homeowners are wondering: Is now the right time to make a move?

This blog breaks down what’s happening, what might be coming next, and how it could affect your home and your plans.

What’s Going on with the Economy?

Let’s start with the big picture. The experts are saying there’s a very high chance (almost 100%)1 that interest rates will start coming down soon—possibly as early as this fall. That’s good news for buyers and sellers alike.

Here’s why it matters:

• Lower rates mean more buyers can afford homes, which could increase demand.
• Homeowners with equity may find it easier to refinance, upgrade, or sell.
• Investors may start looking again, especially in areas with older homes and larger lots.

At the same time, inflation is cooling off, people are feeling more confident about their finances, and Southern Frederick County continues to grow2—especially with major job hubs like DC and Baltimore nearby.

Who’s Holding the Most Equity?

One of the biggest trends shaping the market is age. National data shows that older homeowners, especially those over 55, hold most of the home equity. Many of them own their homes outright or have very low mortgages.

Here’s how that plays out locally: 

What to Expect in the Next Year

Here’s a simple forecast for what might happen in our area:

• More homes for sale from longtime owners who are ready to downsize or relocate.
• Renovations and upgrades as homeowners use their equity to improve or age in place.
• First-time buyers entering the market as rates drop and new construction opens up.
• Investors returning, especially in areas with older homes and larger lots.
• More conversations about legacy planning, gifting homes to family, or making smart moves while values are strong.

What Should You Do?

You don’t have to make a big decision right away—but if you’re thinking about your next chapter, here are six smart ways to start:

1. Get a free home value check: Understand what your property is worth today based on local trends and recent sales.
2. Explore Maryland’s senior tax credits: Learn how programs like the Homestead Tax Credit or Senior Property Tax Credit could reduce your annual costs.
3. Consider aging-in-place upgrades: Use your equity to make your home more comfortable and accessible for the years ahead.
4. Talk about legacy planning: Whether you’re thinking about gifting your home to family or preparing for future transitions, it helps to have a plan.
5. Look into downsizing options: If your current home feels too large or high-maintenance, there may be smaller, more manageable homes nearby that still fit your lifestyle.
6. Schedule a no-pressure consultation: I’m happy to walk through your options, answer questions, and help you explore what’s possible—on your timeline, with no obligation. I’m here to help you explore those questions—no pressure, just honest guidance.

Want to talk through your options?

I'm optimistic about the near future. This is a great time to plan your next move. I offer free consultations for homeowners who want to understand their equity or explore their options.

Thank you for reading this article. I would love to meet you and talk about real estate, and perhaps your future plans. If you know anyone else considering a move, I’d be grateful for your referral. I promise to take great care of them.

1 According to CME Group’s FedWatch Tool, futures markets are currently pricing in a near-99% chance of a rate cut at the next Federal Reserve meeting.” You can explore it directly on CME Group’s FedWatch page.

2 Frederick County is experiencing strong economic and commercial growth, particularly in the southern corridor, with GDP rising to $15.4 billion and significant capital investment and job creation in FY 2025. Major redevelopment plans, including the South Frederick Corridors Plan and Livable Frederick Master Plan, aim to transform this area into a vibrant hub for housing, business, and innovation. Investments in infrastructure, mixed-use development, and workforce housing are central to this vision.

Please note that this post was crafted with support from Microsoft Copilot.

2025 Real Estate Market Predictions for Southern Frederick County

As we enter the new year, it's time to forecast the real estate market for 2025. While predictions often change within months, evaluating recent trends and combining national and local insights can provide a
useful outlook for Southern Frederick County, Maryland (SFC).

My Prediction

Southern Frederick Md. Local Area for Prediction

For early 2025, I anticipate minimal changes from 2024. Inventory levels, consumer debt, and interest rates are likely to remain stable, keeping home prices relatively unchanged. If mortgage rates decrease by a point, pent-up demand could lead to a strong first half of the year. However, significant positive changes may not occur until late 2025 or 2026, as the new administration's policies take effect. These changes, whether through legislation or executive orders, will take time to impact the economy, if they help at all.

Key Factors

1. Mortgage Rates: Predictions suggest rates will stay above 6.5% in 2025. For market gains, rates need to drop below 5.75%. For more details, see my post on Decoding Mortgage Rates.
2. Low Housing Inventory: Inventory in SFC has decreased by 42% since 2020, with no signs of improvement. Telecommuting trends may reverse, potentially affecting inventory levels. The new administration's policies will also limit telecommuting significantly, impacting the market. For more details, see my post on Understanding Low Housing Inventory
3.  Consumer Debt: Credit card debt has surged 32% since May 2021, exceeding $1 trillion.

   

   Consumer Debt

   Delinquency rates are also skyrocketing. Debt affects mortgage qualifications as lenders use the debt-to-income ratio to set borrowing limits. Rising delinquency rates show this problem is not getting better soon. The government is considering temporary limits on credit card interest rates to reduce consumer debt, but that is wishful thinking for now.
4. New Administration Policies: The new administration’s policies are starting to be implemented, with the aim to boost the U.S. economy. Key areas include:
• Housing: A few new federal employees may seek housing in SFC, potentially affecting the market. However, most of them will reside in Montgomery County and Northern Virginia.

o   Deportations of undocumented immigrants could significantly impact the housing market. While precise figures for Frederick County are unavailable, the potential effects are noteworthy. Forced deportations may increase the availability of rental properties, easing that segment of the market. However, properties owned by undocumented individuals could present challenges. Although I am not a lawyer, it is likely that these individuals would retain ownership but must continue making mortgage payments to avoid foreclosure. The resolution of these issues will be interesting to observe.

Self-deportation might result in a more orderly process, allowing individuals to manage their exit more effectively.

• Economic Improvements: Policies on tax cuts, energy independence, deregulation, and government efficiency have the potential to impact the market, though their effects will take time to materialize.

 

Actions to Consider

Timing the market is challenging and not recommended. If you are planning on selling and/or buying soon, contact me now at 301-873-2106. We can get the ball rolling.

If you're planning a move, start preparing now. Buyers should focus on reducing debt, improving credit scores, saving for a down payment. You also need to decide where you want to live. Contact me, I can help with that.

 Sellers should declutter, make minor repairs, and plan their next steps for their future. For more ideas, please see these previous posts: Benefits and Roadblocks When Decluttering, Overcoming the Difficulties of Decluttering, Strategies for Showcasing Your Home for Sale and Transform Your Home from “Just Another Listing”.

I am available to help you act when you think the time is right. If you'd like to discuss your situation, call or text me at 301-873-2106 or email me at BReynolds@LNF.com. I'm here to help with your real estate needs, even if your purchase or sale is in the future. Your referrals are always appreciated.

Let's get started. Contact me at 301-873-2106 or email me at BReynolds@LNF.com.

Decoding Mortgage Rates: The Key Factors to Watch

 

Mortgage rates significantly impact the housing market, yet their determination is often misunderstood. It may seem rates are set arbitrarily, but there's a logical framework behind them. By understanding these factors, you can make informed short-term forecasts. However, long-term predictions are challenging due to numerous and various influences, such as natural disasters, political upheavals, new government policies, and legislative changes, which complicate the landscape.

We'll explore the major influences on mortgage rates and considerations for individual borrowers.

1. Federal Reserve Policies: The Fed sets the federal funds rate, impacting overall borrowing costs. When the Fed raises rates to combat inflation, mortgage rates typically increase. Conversely, lower rates to stimulate growth lead to decreased mortgage rates. Mortgage rates often move in anticipation of future Fed moves.

2. Inflation: Inflation reduces the money’s purchasing power, prompting lenders to demand higher interest rates. Higher inflation usually results in higher mortgage rates. Conversely, low inflation generally leads to lower rates.

3. Economic Indicators: Key indicators such as employment rates, GDP growth, and consumer spending provide insights into the economy's health. Strong performance often leads to higher mortgage rates due to increased credit demand. During downturns, reduced demand can lead to lower rates.

4. Housing Market Conditions: Supply and demand dynamics significantly affect mortgage rates. High demand and limited supply drive rates up, while oversupply can lead to lower rates.

5. Global Events: International events, like geopolitical tensions or economic crises, impact investor confidence and financial markets. Uncertainty or instability can cause mortgage rates to fluctuate.

6. Government-Sponsored Enterprises (GSEs): Entities like Fannie Mae and Freddie Mac play a crucial role by buying and securitizing mortgages. Their policies and actions affect mortgage rates. Changes in GSE regulations can result in rate adjustments.

Investors balance these factors to determine acceptable returns from their loans. The final adjustments to the rate offered to specific borrowers depend on: 

1. Credit Scores and Personal Financial Health: Higher credit scores generally result in slightly lower mortgage rates due to perceived lower risk. Conversely, lower scores can lead to slightly higher rates due to increased default risk.

2. Lender Policies: Different lenders have varying criteria and policies affecting the rates they offer. Factors like the lender's cost of capital, risk appetite, and competitive positioning influence interest rates. Promotions and special offers can also lead to temporary fluctuations.

Forecasting interest rates months or years from now is challenging at best. Most 2024 predictions were off, so take future outlooks with caution—they're educated guesses too. For your edification, here are one set of predictions for 2025:

Figure 1: Source: US News

Should You Wait or Buy in 2025?

Understanding how mortgage rates are determined shows many uncontrollable variables make predictions short-lived. If you're a prospective homeowner waiting for rates to drop, remember macroeconomic issues are beyond your control. Decide if you're financially ready to purchase a home and manage its expenses.

Focus on What You Can Control: Instead of fixating on rates, prioritize actions to lower your individual rate, such as saving for a larger down payment and improving your credit score.

Should You Wait or Sell in 2025?

If you're ready to sell, don't try to time the market based on rates alone. In Southern Frederick County and northern Montgomery County, low inventory and eager buyers mean a well-prepared, appropriately priced home will likely sell quickly at a fair price.

If you'd like to discuss what's best for you, feel free to call or text me at 301-873-2106 or email me at BReynolds@LNF.com. We can have an open discussion about your circumstances so you can make an informed decision. Remember, I don't do hard sales or pressure you into action—that's entirely up to you.

As always, I'm here to assist with your real estate needs, even if your purchase or sale is some time away. The better prepared you are, the less stressful the process will be. Finally, if you know anyone looking to buy or sell, your referral would be greatly appreciated. 

Let's get started. Contact me at 301-873-2106 or email me at BReynolds@LNF.com.