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U.S Department of Housing and Urban Development

Spotlight on the Housing Market

in the Baltimore-Columbia-Towson,
MD MSA
U.S. Department of Housing Stabilize Development | Office of Policy Development and Research
The Obama Administration’s Efforts To and Urbanthe Housing Market and Help American Homeowners | April 2015

The Baltimore-Columbia-Towson, MD Metropolitan Statistical Area (Baltimore MSA) is located in central Maryland and includes the independent
city of Baltimore and 6 counties: Anne Arundel, Baltimore, Carroll, Harford, Howard, and Queen Anne’s. As with other areas in the Mid-Atlantic,
the foreclosure crisis was less severe than in most parts of the country, but the recovery from the crisis and subsequent recession has been
somewhat slower than for the nation overall. Home prices appreciated 30 percent more than the national rate during the housing bubble, but
the ensuing decline in prices was less steep—26 percent compared with a national decline of 32 percent. The lower property values and the
resulting underwater mortgages were primarily fueled by investor speculation and unsustainable mortgage lending going into the crisis. The rise in
unemployment and underemployment during the recession added further to rising defaults and the decline in property values. The share of mortgages
at risk of foreclosure (those 90 or more days delinquent or in the foreclosure process) did not peak until the beginning of 2013—three years later
than for the nation—but reached a similar rate. Contributing to the later peak in the share of mortgages in the foreclosure pipeline in Baltimore
was the passage of state legislation in mid-2010 that allowed for foreclosure mediation in an effort to prevent foreclosures. Baltimore currently ranks
83rd among metropolitan areas for share of mortgages at risk of foreclosure. The share of distressed mortgages has declined in Baltimore—the
result of nearly five years of moderate job growth, state legislation that curtailed foreclosure actions, and the local use of the Administration’s
mortgage assistance programs. The need for recovery efforts continues, however, as Baltimore ranks high among metropolitan areas for the
proportion of mortgages that remain underwater. The Administration’s broad approach to stabilizing the housing market has been a real help
to homeowners in Baltimore and the surrounding area. This addendum to the Obama Administration’s Housing Scorecard provides a summary of
local economic trends and conditions and the impact of the Administration’s efforts to stabilize the housing market and help local homeowners.

Population Growth, Employment,
and Housing Market:

With more than 2.7 million people according to the most
recent Census, the Baltimore MSA is the 20th largest in
the nation. From 2000 to 2010, Baltimore’s population
increased by an average of 15,750 people, or 0.6 percent,
a year. Natural population growth (births minus deaths)
accounted for 74 percent of the population growth during
this period. An average of nearly 4,100 people per year
moved to the Baltimore MSA during the last decade,

Baltimore MSA Housing Unit Growth Outpaced Population and
Household Growth During the Past Decade
Date of Census

4/1/2000

4/1/2010

Baltimore MSA Population

2,552,994

2,710,489

Annual Growth Rate

—

0.6%

974,071

Baltimore MSA Households

1,038,765

Annual Growth Rate

—

0.7%

Baltimore MSA Housing Units

1,048,046

1,132,251

Annual Growth Rate

—

0.8%

Source: Census Bureau (2000 and 2010 Decennial)

accounting for the remaining 26 percent of the net population increase. The
highest influx of people moving to the area—an average of 8,000 annually—
occurred between the years 2001 and 2004.
During the decade spanned by the Census, new housing
construction grew faster than household growth in Baltimore.
Net annual housing unit growth of 0.8 percent in the Baltimore metropolitan
area during the last decade was greater than the corresponding population
and household growth rates of 0.6 and 0.7 percent, respectively. The rate of
increase in vacant units in the Baltimore metro area during the 2000s was
considerably less than the national rate, however, with vacant units increasing at
an average annual rate of 2.6 percent, compared with 4.4 percent nationally,
according to the Census Bureau. Investor speculation stimulated overbuilding
in the years leading up to the housing crisis, with the increase in the share of
investor purchases very similar to the national upturn. Specifically, from 2000
to 2005, investor home sales rose from 7.2 to 13.7 percent of total sales in the
Baltimore metro area, while the corresponding increase for the nation was from
8.0 to 14.6 percent. Subprime lending also contributed to the overbuilding. A
study by the National Bureau of Economic Research indicates that the Baltimore
MSA ranked 31st out of the top 107 metropolitan areas with the highest share
of subprime originations during 2005, with subprime originations as a share of
new mortgages at 22 percent in Baltimore. A conservative estimate based on

Spotlight on the Housing Market in the Baltimore-Columbia-Towson, MD MSA | Page 1

U.S Department of Housing and Urban Development

U.S. Department of Housing Stabilize Development | Office of Policy Development and Research
The Obama Administration’s Efforts To and Urbanthe Housing Market and Help American Homeowners | April 2015
HMDA (Home Mortgage Disclosure Act) data indicates that
high-cost (proxy for subprime) originations tripled nationally
between 1998 and 2005, while a study by the Center for
Responsible Lending estimates that approximately 90 percent
of subprime mortgages during that period faced increases in
monthly payments of 30 to 50 percent within a few years,
causing borrowers with subprime loans to typically default at
more than 7 times the rate of other mortgages.
Baltimore’s economy is improving. The local economy
was growing moderately before it began to decline in
2008. From the second quarter of 2003 through the first
quarter of 2008, jobs increased at an average annual rate
of 1.2 percent, the same as the national increase during this
period. The impact of the Great Recession was not as severe
for the Baltimore metropolitan area as it was for the nation.
Jobs in the MSA declined at an annual rate of 2.2 percent,
from the second quarter of 2008 through the first quarter of
2010, compared with a national decline of 3.1 percent. The
recovery from the recession has been somewhat weaker for
Baltimore than for the nation, however, with jobs increasing
at an annual rate of 1.5 percent from the second quarter of
2010 through the first quarter of 2015, compared with a
1.7-percent increase nationally.
The Baltimore MSA is home to several large hospitals and
institutions of higher learning. During the recent recession,
a period when every other private sector in the MSA lost
jobs, the education and health services sector expanded
at an average annual rate of 2.4 percent. Job losses were
most severe during this period in the construction sector,
where jobs declined at an annual rate of 10.9 percent and
accounted for nearly 30 percent of the loss in employment
in the MSA. Job losses were also fairly substantial for
the information sector (-6.7 percent), manufacturing (-5.9
percent) and retail trade (-4.8 percent). The recovery from
the recession has been led by the professional and business
services sector (4.5 percent) and leisure and hospitality
(4.0 percent), with jobs in education and health services
increasing at an average rate of 1.9 percent. Growth in
these sectors was offset by average annual job losses of 4.4
percent in information and 2.2 percent in manufacturing.
The not seasonally adjusted (NSA) unemployment rate for
the Baltimore MSA peaked at 8.7 percent in February 2010
and as of March 2015 has fallen to 5.7 percent (seasonally
adjusted data for metro areas are currently unavailable).
In comparison, the NSA unemployment rate for the nation
peaked in January 2010 at 10.6 percent and fell to 5.6
percent by March 2015. The national seasonally adjusted
unemployment rate peaked in October 2009 at 10.0
percent, falling to 5.5 percent by March 2015.

Home sales in Baltimore have improved, but growth slowed in
2014. After peaking at 69,700 units sold in 2005, purchases of previously
owned (existing) homes in the Baltimore MSA declined between 2006 and
2011 by an average annual rate of 10 percent. Existing home sales have risen
since 2011 by an average annual rate of 9 percent, although the pace slowed
to only 1 percent growth in 2014. By comparison, existing home sales in the
nation peaked in 2005 and declined by an annual rate of 14 percent between
2006 and 2008. Existing home sales began to rise again nationally in 2009,

Spotlight on the Housing Market in the Baltimore-Columbia-Towson, MD MSA | Page 2

U.S Department of Housing and Urban Development

U.S. Department of Housing Stabilize Development | Office of Policy Development and Research
The Obama Administration’s Efforts To and Urbanthe Housing Market and Help American Homeowners | April 2015
increasing at an average annual rate of almost 5 percent
from 2009 to 2013, but slowed in 2014, declining by
3 percent. As for new home sales, purchases peaked in
2006 at 7,875 units in the Baltimore MSA before falling from
2007 through 2009 at an annual rate of nearly 20 percent.
New home sales increased at an annual rate of 4 percent
(albeit on a low base) from 2012 to 2013, but the pace
slowed in 2014, declining by nearly 2 percent. Nationally,
new home sales peaked in 2005 before declining by an
annual rate of 13 percent from 2006 through 2011; sales
have increased since at an annual rate of 14 percent (also
on a low base) from 2012 through 2014.
Home prices in Baltimore rose more steeply
but declined less than for the nation during the
housing crisis. The CoreLogic repeat-sales house price
index (HPI) shows that home prices in the Baltimore MSA
rose nearly 30 percent more than for the rest of the nation
during the housing bubble but had a less pronounced
decline of 26 percent from their peak in September 2006 to
their low in March 2012. The national peak-to-low decline
was 32 percent (from April 2006 to March 2011). Investor
speculation had an impact on the rise in home prices in
the Baltimore MSA, with sales to investors averaging 11
percent in Baltimore during the bubble, but lower than the
13 percent share nationally. As described earlier, subprime
lending was also a factor in fueling home prices in the
Baltimore MSA. Since reaching their low point, home prices
in the Baltimore metropolitan area have risen 6 percent—
one-fifth the 30 percent low-to-current increase for the nation.
Home values in the Baltimore MSA are currently on par with
prices in late 2004, while home prices in the nation are on
par with early-2005 prices.
The apartment vacancy rate in Baltimore has
tracked fairly closely with the national rate during
the past two years. According to MPF Research, the
Baltimore MSA apartment vacancy rate was 4.7 percent in
the first quarter of 2015, up from 4.6 percent a year earlier,
representing generally balanced market conditions. The
uptick in the vacancy rate occurred with the completion of
a large number of new apartment projects during the past
year; the demand for rental units has been especially strong
in Baltimore City. The national apartment vacancy rate was
4.5 percent during the first quarter of 2015, down from
5.0 percent a year earlier. During the first quarter of 2015,
the average apartment rent in the Baltimore MSA increased
1.6 percent from a year earlier to $1,211, compared with
a nationwide increase of 5.0 percent to $1,186. Overall
rental market conditions in the Baltimore metro area remain
weaker than the apartment market due to a high number

of vacant single-family rental properties. According to the CPS/HVS (Current
Population Survey/Housing Vacancy Survey) conducted by the Census Bureau,
as of the first quarter of 2015 the overall rental vacancy rate for the Baltimore
MSA was 9.2 percent compared to a national rate of 7.1 percent. The 2013
ACS (American Community Survey) indicates that single-family homes accounted
for 38 percent of all rental units in the Baltimore MSA, while representing 35
percent of all rental units in the nation.

Trends in Mortgage Delinquencies and
Foreclosures:

The share of distressed mortgages in Baltimore has declined but
still exceeds the national level. As of February 2015, the Baltimore MSA
placed 83rd out of 381 metropolitan areas ranked by share of mortgages at
risk of foreclosure (90 or more days delinquent or in the foreclosure process)
according to Black Knight Financial Services, Inc. From 2000 through 2004,
the share of mortgages at risk of foreclosure in the Baltimore MSA was above
the corresponding national share, but from 2005 through the middle of 2011,
the share of distressed mortgages in Baltimore fell below the national rate,
according to CoreLogic data. In 2007 and 2008, when the foreclosure crisis
began and single-family foreclosures were largely driven by unaffordable nontraditional loan products, the increase in mortgages at risk of foreclosure in the
Baltimore MSA rose at a slightly slower pace than nationally. Specifically, from

Spotlight on the Housing Market in the Baltimore-Columbia-Towson, MD MSA | Page 3

U.S Department of Housing and Urban Development

U.S. Department of Housing Stabilize Development | Office of Policy Development and Research
The Obama Administration’s Efforts To and Urbanthe Housing Market and Help American Homeowners | April 2015
the beginning of 2007 to the end of 2008, the share of
distressed mortgages in Baltimore increased 2.7 percentage
points (from 1.0 to 3.7 percent), compared with a national
increase of 2.9 percentage points (from 1.6 to 4.5 percent).
Beginning in 2009, foreclosures were increasingly driven by
loss of income, unemployment, and strategic defaults as the
economy worsened, according to research by the Federal
Reserve Bank of Chicago. A sharp spike upward in the
share of distressed mortgages occurred in 2009 for both the
Baltimore MSA and the nation. By early 2010, mortgages at
risk of foreclosure reached a peak of 8.0 percent nationally,
and have since fallen to 3.6 percent. The share of distressed
mortgages in the Baltimore MSA continued to increase for
another 3 years, peaking at 7.9 percent in the beginning
of 2013; the share has since fallen to 5.0 percent as of
January 2015. Contributing to the later peak in the share of
mortgages in the foreclosure pipeline in Baltimore was the
passage of state legislation in mid-2010 that allowed for
foreclosure mediation in an effort to prevent foreclosures.
The time it takes to complete a foreclosure in the State of
Maryland is still well below the national average, however.
As of the first quarter of 2015, the average time to complete
a foreclosure in the State of Maryland was 493 days
compared with a national average of 620 days. The current
decline in mortgages at risk of foreclosure in Baltimore is
similar to the national trend. Over the last year, the number
of distressed mortgages decreased by 26 percent—from
20,150 to 14,850—compared with a national decline of 25
percent over the same period.
RealtyTrac data show the rate of foreclosure
completions in Baltimore has been almost half
the national rate since April 2009. From April 2009
through March 2015, the number of foreclosure completions
as a percentage of all housing units was 1.7 percent in
Baltimore, nearly one-half the 3.1-percent rate for the nation.
Since reaching a low point at the end of 2011, foreclosure
completions have become more volatile. In the first quarter of
2015, for example, foreclosure completions were down 30
percent from the previous quarter but up 72 percent from the
previous year. With rising home prices and low inventories
of homes for sale, lenders have been resolving defaults
Foreclosure Completion Rates in the Baltimore MSA
First Quarter 2015
Area
Baltimore MSA
Nation

Foreclosure
Completions

Foreclosure
Rate

Since April 1, 2009
Foreclosure
Completions

Foreclosure
Rate

1,320

0.12%

19,250

1.7%

82,100

0.06%

4,104,700

3.1%

Notes: Foreclosure rates as percent of all housing units. Data through March 2015
for foreclosures since April 2009.
Sources: Realty Trac and Census Bureau.

more quickly. In addition, foreclosure activity has been increasing in states
such as Maryland, where a slower foreclosure process led to a backlog that is
beginning to clear.
The efforts of numerous state and local entities and financial
institutions in partnership with the federal government have
helped contain the rate of foreclosures. In April 2008, Governor Martin
O’Malley signed the Foreclosure Law Process Reform Bill (Senate Bill 216/
House Bill 365), which provides protections for homeowners in the foreclosure
process, including more time and notice before and after a foreclosure action
is filed, more rights during the process, and more time to assert those rights
should the lender fail to comply with the law. In May 2010, Maryland passed
an additional foreclosure prevention law (House Bill 472), which allows a
borrower to file a request for foreclosure mediation in which the parties involved
meet with an impartial individual in an effort to reach an agreement on a loan
modification or other form of loss mitigation. The need for recovery efforts
continues. As of the fourth quarter of 2014, 13.2 percent of mortgages in the
Baltimore MSA remain underwater, up slightly from 13.0 percent a year earlier,
according to CoreLogic. This compares to a 10.8 percent share of underwater
borrowers (those who owe more on their mortgage than the value of their home)
at the national level.

The Administration’s Efforts To Stabilize the
Baltimore MSA Housing Market:

The Administration’s mortgage and neighborhood assistance programs—the
Home Affordable Modification Program (HAMP, which is part of the broader
Making Home Affordable program), the Federal Housing Administration (FHA)
mortgage assistance programs, and the Neighborhood Stabilization Program
(NSP)—combined with assistance from the HOPE Now Alliance of mortgage
servicers and the National Mortgage Servicing Settlement have helped stabilize
the Baltimore MSA housing market.
From the launch of the Administration’s assistance programs in April 2009
through the end of February 2015, more than 100,600 homeowners have
received mortgage assistance in the Baltimore metropolitan area. More
than 56,700 interventions were completed through the HAMP and FHA loss

Spotlight on the Housing Market in the Baltimore-Columbia-Towson, MD MSA | Page 4

U.S Department of Housing and Urban Development

U.S. Department of Housing Stabilize Development | Office of Policy Development and Research
The Obama Administration’s Efforts To and Urbanthe Housing Market and Help American Homeowners | April 2015
mitigation and early delinquency intervention programs.
An estimated additional 43,900 proprietary mortgage
modifications have been made through HOPE Now Alliance
servicers. While some homeowners may have received help
from more than one program, the number of times assistance
has been provided in the Baltimore metropolitan area is
more than five times the number of foreclosures completed
during this period (18,800).
Under the landmark National Mortgage Servicing
Settlement signed in February 2012, more than 17,366
Maryland homeowners have benefited from over $1 billion
in refinancing, short sales and completed or trial loan
modifications, including principal reduction on first and
second lien mortgages provided as of June 30, 2013.
Nationwide, the settlement has provided more than $50
billion in consumer relief benefits to more than 631,000
families. That is in addition to the $2.5 billion in payments
to participating states and $1.5 billion in direct payments to
borrowers who were improperly foreclosed upon between
2008 and 2011.
Given over three rounds, the Neighborhood
Stabilization Program has invested $7 billion
nationwide to help localities work with non-profits and
community development corporations to turn tens of
thousands of abandoned and foreclosed homes that lower
property values into homeownership opportunities and the
affordable rental housing that communities need.
Baltimore MSA Housing Units to Date Benefitting
From NSP by Type of Activity
Construction or Rehabilitation
Homeownership Assistance to Low- and Moderate-Income
Total Housing Units
Additional Projected Housing Units

237
37
274
177

Notes: These housing units are the result of direct NSP grants to recipients in the
Baltimore MSA. Data on units resulting from sub-grants to the Baltimore MSA from the
State of Maryland are not available.

NSP1 funds were granted to all states and selected local governments on a
formula basis under Division B, Title III of the Housing and Economic Recovery
Act (HERA) of 2008; NSP2 funds authorized under the American Recovery and
Reinvestment Act (the Recovery Act) of 2009 provided grants to states, local
governments, nonprofits and a consortium of nonprofit entities on a competitive
basis; and NSP3 funds authorized under the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010 provided neighborhood stabilization grants to
all states and select governments on a formula basis.
Overall, a total of $32.8 million in NSP funds has been awarded to three
grantees in the Baltimore MSA: the City of Baltimore, Baltimore County,
and the non-profit, Healthy Neighborhoods Inc. In addition, a total
of $31.7 million in NSP funding was awarded to the State of Maryland, of
which $9.6 million has been reallocated to the Baltimore MSA. Approximately
274 households have already benefited from direct NSP grants to recipients
in the Baltimore MSA, and activities funded by the program are expected to
provide assistance to an additional 177 owner-occupied and renter households.
Data on households benefiting from NSP funds reallocated to the Baltimore
metro area from the State of Maryland are currently not available.

Spotlight on the Housing Market in the Baltimore-Columbia-Towson, MD MSA | Page 5


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