In September 2023, mortgage rates were sitting at roughly 7.1%, the highest level in over 20 years, and I told my audience directly: don’t believe the crash talk. My forecast at the time was that if rates held in the 6.5% to 7.5% range, Montgomery County would keep seeing a strong market with modest appreciation, a softer Q4, and then a return to red-hot conditions in Q1 and Q2 the following year. The one caveat I gave was that if rates broke above 8%, all bets were off. Looking back at this call now is a useful exercise, because it shows exactly how I read a market using absorption rate instead of headlines, and it’s the same method I still use today whenever rates make a big move.

Why did I make this call when everyone else was predicting a crash?

Because the fear-based headlines weren’t matching what the actual numbers showed. I’m Kevin Grolig, a real estate agent with Compass based in Potomac, Maryland, and I work with buyers and sellers relocating into, within, and out of Montgomery County. When rates hit 7.1% in the fall of 2023, the highest they’d been in two decades, it was easy to assume we were heading toward another 2008-style crash. Higher rates were clearly weeding buyers out of the market and cutting into everyone’s buying power. But a crash requires more than expensive money — it requires a glut of unsold inventory. That’s not what the data showed.

What did the sales numbers actually look like?

Sales volume was down, but not collapsing. In August 2023, Montgomery County saw 902 homes sold compared to 1,163 during the same month in 2022, a 15% year-over-year decrease. Dollar volume dropped too, from $746 million to $626 million, a 16% decline. On the surface, those numbers look like classic pre-crash signals. That’s exactly why I never look at sales in isolation — you have to pair them with what’s happening on the supply side before drawing any conclusion.

What was happening to housing inventory at the same time?

Inventory was shrinking even faster than sales. As of September 1, 2023, there were 845 homes on the market in Montgomery County, down from 1,114 homes at the same point in 2022. That’s a 24% drop in available inventory, a steeper decline than the 15% drop in sales. When supply falls faster than demand, that’s not a crash signal. That’s a tightening market, and it’s the single most important thing the “fear headlines” were missing that fall.

How does absorption rate settle the debate between sales down and inventory down?

Absorption rate is the number that actually answers the question, and it showed a market getting tighter, not weaker. You calculate it by dividing monthly sales into remaining inventory. For September 2023, that’s 902 sales divided into 845 homes on the market, which comes out to an absorption rate of 0.93 — meaning under one month of supply at the current sales pace, or roughly three and a half weeks. Compare that to August 2022, when 1,163 sales divided into 1,114 homes produced an absorption rate of 1.03, just over a month of supply. So even with sales down and inventory down, the market actually got tighter year over year. As a rule of thumb, most economists define a seller’s market as three months of inventory or less, a balanced market as three to four months, and a buyer’s market as four months or more. At under one month, Montgomery County wasn’t close to buyer’s market territory, no matter how the headlines read.

What did I predict would happen through Q1 and Q2 of the following year?

I predicted continued strength with modest appreciation, provided rates stayed in a defined range. Specifically, I said that if rates remained between 6.5% and 7.5%, expect a market that stays strong with modest appreciation, a somewhat softer Q4 as the calendar year wound down, and then a repeat of the red-hot conditions from the prior two years once Q1 and Q2 arrived. I also drew a clear line: if rates rose significantly above 8%, that outlook would change and we’d likely see a genuinely slower market in the following Q1 and Q2. I was careful to frame that as a real risk, not a dismissal — I didn’t know for certain which direction rates would break, and I said so on camera.

What did this forecast mean for buyers at the time?

It meant a short window of real opportunity before conditions tightened back up. My advice to buyers in that moment was that the next two to three months represented a better chance to negotiate and to actually get protective contingencies back into their contracts — home inspection contingencies, appraisal contingencies, financing contingencies — all the things that get waived in a full-blown seller’s market. That window existed specifically because the softer Q4 pulled some buyers out of competition temporarily, not because the fundamentals had turned.

What did it mean for sellers?

It meant timing mattered more than most sellers assumed. I told sellers who were planning to list within the next year to target January or February rather than waiting for the traditional spring market. In Montgomery County, the real spring market starts right after the holidays, not in March or April. The buyers who show up in January and February tend to be serious and businesslike — they want to find a home, close, and move in. Waiting until spring means competing against a much larger wave of both buyers and sellers, which erodes the advantage a seller has when inventory is this tight.

What’s the lesson for reading today’s rate headlines?

Don’t take a single data point at face value — check it against Freddie Mac’s official rate survey and FRED’s historical data before reacting. Rate headlines move fast and often strip out context. Whenever mortgage rates make a big jump, I go straight toFreddie Mac’s Primary Mortgage Market Surveyfor the actual weekly average, and I cross-reference longer-term trends usingFRED. Pairing that with local absorption rate data is how you separate a genuine shift from a scary number taken out of context. It’s the exact process that led to this call in 2023, and it’s the same process I use for every market update since.

The bottom line

Rate spikes trigger fear, but fear isn’t a market indicator — absorption rate is. In the fall of 2023, sales were down, inventory was down further, and that combination pointed to a tight market with real opportunity for buyers willing to move before the spring crowd showed up. If you’re trying to make sense of where rates and local inventory stand right now, I break down the numbers regularly, and you can always see the currentMontgomery County market statsfor the latest read. If you’re weighing a purchase, myguide to buying a homewalks through the process from financing to closing.

FAQ

Did mortgage rates go above 8% after this forecast?

Rates did climb further in the months that followed before eventually pulling back. The point of flagging the 8% threshold wasn’t to predict an exact number — it was to give buyers and sellers a clear marker for when the outlook would meaningfully change.

What is absorption rate and why does it matter more than sales totals alone?

Absorption rate divides monthly sales by remaining inventory to show how quickly the market would sell out if nothing new got listed. A number under one month signals a tight seller’s market, three to four months signals balance, and four-plus months signals a buyer’s market. It matters more than a single sales or inventory figure because it accounts for both sides of supply and demand at once.

Is Montgomery County still a seller’s market?

Conditions shift with rates and seasonal inventory, so the honest answer is to check current numbers rather than rely on a snapshot from any single point in time. Mystats pagereflects the latest local data.

Why does Kevin recommend listing in January or February instead of spring?

Because in Montgomery County, serious buyers come out right after the holidays, ahead of the larger spring wave of both buyers and sellers. Listing early means less competition from other sellers while demand is still strong.

Where can I check current mortgage rates myself?

Freddie Mac’s Primary Mortgage Market Survey publishes the weekly national average, and FRED provides historical context so you can see how today’s rate compares to prior years.

If you want a straight read on where rates and local inventory stand right now, and what that means for your specific timeline, let’s talk.Book a free 30-minute call with meorreach out hereanytime.

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Sources and next steps

Verified local sources:U.S. Census QuickFacts for Montgomery County;WMATA maps and schedules;Montgomery County Open Data;Montgomery Parks trails and facilities.

Related Kevin guides:home buying guide;relocation guide;book a call.

Watch the YouTube videoorbook a 30-minute strategy call with Kevin.

Expanded local research sources:Visit Montgomery travel guide;Visit Montgomery restaurant directory;Tripadvisor Montgomery County things to do;Tripadvisor Montgomery County restaurants;Google Maps restaurants near Potomac;Google Maps things to do near Potomac;Reddit MoCo discussion search for Potomac;Reddit thread: moving from DC to MoCo;Reddit thread: visitor activities in MoCo;WMATA rail and bus maps;Montgomery Parks;Montgomery County Open Data;Niche Montgomery County livability;MoCo360 local news.

Contextual links for this video

Kevin site links:Potomac guide;home selling guide;home buying guide;Montgomery County relocation guide;market stats.

Outside research links for this video:Visit Montgomery travel guide;Visit Montgomery restaurants;Google Maps restaurants near Potomac;Reddit discussion search for this topic;Google context search for this video.

Kevin process link: why Kevin’s local process matters.