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According to the January 2025 Alabama Economic and Real Estate Report released on Tuesday by the Alabama Association of REALTORS®, the state’s housing market experienced slight decreases in both home sales and median sales prices in December, which is indicative of the fact that winter is traditionally the slowest season in real estate due to weather, holidays, and other factors.
Alabama recorded 4,876 home sales in December, which represents a 5.7 percent decrease from November and a 2.2 percent drop from the same period in 2023.
Though average 30-year mortgage rates declined by 21 basis points to 6.60 percent through the first two weeks of December, average rates then began a steady increase through the rest of the month and reached 7.04 percent by January 16, 2025.
“Mortgage rates have climbed quickly over the last five weeks, which likely doesn’t bode well for sales, and rates are very likely to remain above 6 percent as the Fed continues its quantitative tightening campaign,” said David Hughes, Economist at Alabama REALTORS®. “If history is any guide, then the first quarter of the year is usually slow for sales, but less competition among buyers, slightly lower prices, and normalizing mortgage rates provide many great reasons for buyers to make a move.”
The median sales price across Alabama fell slightly to $220,194, a 0.4 percent decrease compared to November and a 1.7 percent year-to-year drop, which ends six straight months of annual increases.
At the same time, the state’s 18,468 active listings at the end of December were 25.4 percent higher than the 14,723 of one year ago. Higher inventory allows buyers more choice and the ability to more easily find a “dream home” that fits their specific wants and needs.
The sold volume in Alabama was $1.16 billion in December, a .09 percent increase from one year ago, but a 6.5 percent decrease month-over-month, which reflects seasonal trends.
The 430 home foreclosures in December marked an 11.7 percent decrease from 2023 but represented a 3.4 percent increase from November.
A new “inflation tracker” featured in the report noted that inflation rose 2.8 percent across the South in December, but the East South Central Division of the South, where Alabama is located, experienced the highest inflation in the region last month at 4.1 percent.
The Alabama Economic and Real Estate Report is published monthly and annually by the Alabama Association of REALTORS®. Click here to view the full monthly and annual reports.
