Maryland remains one of the nation's higher-income states, but slower homebuilding activity is creating housing supply challenges for residents and families considering a move to the state.
Maryland dropped eight positions in the latest Grading the States: Affordability & Homebuilding Report Cards—2026 Update, falling from No. 23 to No. 31 nationally and receiving an overall grade of C.
The eight-position decline was among the largest in the report.
For individuals and families considering relocating to Maryland, the results highlight an important dynamic in the state's housing market: Maryland households have relatively strong incomes, but new-home construction is not keeping pace with the state's population.
Maryland's High Incomes Remain a Strength
Maryland reported a median household income of $99,340, the highest among the states experiencing the largest declines in the rankings.
Higher household incomes can help Maryland residents absorb housing costs that would be difficult to sustain in lower-income states. Maryland's proximity to major employment centers—including Washington, D.C., Baltimore, Fort Meade, Frederick and the Interstate 270 technology corridor—also gives residents access to a diverse regional job market.
But income is only one part of housing affordability.
The availability of homes matters, too.
Maryland Isn't Building Enough Housing Relative to Its Population
One of the most significant findings for Maryland was its permit-to-population ratio of just 0.51.
The measure compares a state's share of new residential building permits with its share of the country's population. A ratio of approximately 1.0 would indicate that a state's share of new permits is roughly proportional to its population.
Maryland's 0.51 ratio suggests the state is permitting new housing at only about half the rate that would correspond with its share of the U.S. population.
Limited construction can become particularly important in desirable communities where buyers and renters are already competing for a constrained supply of homes.
When housing production fails to keep pace with demand, buyers may encounter fewer choices, greater competition and continued pressure on prices.
New Construction Doesn't Always Mean Affordable Housing
Building additional homes can help increase housing supply, but the type and price of those homes also matter.
In Maryland, newly constructed homes can carry a substantial premium compared with existing properties. That means buyers searching for a brand-new home may face a significantly different price point than those considering Maryland's existing housing stock.
This creates an additional challenge for first-time buyers and middle-income households.
New development may increase overall inventory, but if much of that construction is concentrated at higher price points, it may do less to address demand for starter homes and other moderately priced housing.
Location Matters for People Moving to Maryland
Maryland's statewide ranking doesn't tell the entire story for someone planning a move.
Housing conditions vary considerably across the state.
A family searching in Montgomery or Howard County may encounter a very different market from someone considering Baltimore County, Harford County, Frederick County, Southern Maryland, Western Maryland or the Eastern Shore.
Home prices, property taxes, commuting costs, school districts, available inventory and new construction can all change significantly from one Maryland community to another.
That makes local research particularly important for relocators.
Someone moving to Maryland for a job in Washington, D.C., for example, may discover that expanding the home search farther into Central Maryland or Frederick County provides different housing options while still maintaining access to the region's employment centers.
Likewise, households working in the Baltimore area may have a broad selection of suburban, urban and smaller-community housing markets within commuting distance.
Housing Supply Could Shape Maryland's Competitiveness
Maryland's decline from No. 23 to No. 31 doesn't mean the state has suddenly become an undesirable place to live.
Instead, the report identifies a potential long-term challenge.
Maryland benefits from high household incomes, major employment centers, universities, health care institutions, federal agencies, transportation connections and proximity to both Baltimore and Washington.
But attracting workers and families also requires enough housing for those households.
If housing construction continues to lag population and employment demand, affordability could become an increasingly important factor in where people choose to live within Maryland—or whether they choose Maryland at all.
For prospective residents, the takeaway is to look beyond statewide averages. Comparing individual Maryland communities based on home prices, available inventory, new construction, commute times, taxes and employment access can reveal considerably different opportunities.
Maryland continues to offer families access to one of the country's most economically significant regions. The state's challenge will be making sure its housing supply grows alongside that opportunity.
For people considering a move to Maryland, housing affordability may increasingly depend not simply on whether they choose Maryland—but where in Maryland they choose to call home.