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Though Alabama enjoyed low unemployment, sustained job growth, and a consistently good economy in 2024, its housing market struggled along with the rest of the nation’s last year according to the Annual Alabama Economic and Real Estate Report released on Monday by the Alabama Association of REALTORS®.
The state’s 62,539 home sales in 2024 declined by roughly 18 percent compared to the 76,258 in 2023, which economists preparing the report attributed to elevated 30-year fixed mortgage rates that remained above 6 percent throughout the year.
It was the second straight year with rates above 6 percent, and indicators point to rates remaining at that level throughout 2025, as well.
“Roughly half of the homeowners in Alabama currently enjoy mortgage rates below 4 percent, and almost 70 percent have rates below 5 percent, so expecting them to abandon those rates for higher ones offers a difficult headwind for our housing market to navigate,” AAR Chief Executive Officer Jeremy Walker said. “Alabama is far from alone, as the housing market across the country last year proved to one of the most challenging in several decades.”
The Wall Street Journal reported last week that home sales in the United States fell to their lowest level in almost 30 years during 2024 and cited “stubbornly high mortgage rates” resulting from the Federal Reserve’s efforts to combat persistent inflation as the reason.
Homes in Alabama are retaining their value as the median sales price across the state rose just slightly to $216,744, a $793 or .04 percent increase from 2023. The 2024 median sales price for Alabama is the third highest annual value on record but still represents affordability for buyers when compared to surrounding states and the rest of the nation.
The 16,959 average active listings in 2024 are an increase compared to the 11,951 of 2023 and represent the highest average in five years, but higher inventory offers buyers more selection and a better opportunity to find the perfect home that fits their needs and desires.
Several statistics in the report, such as continuing positive net migration to Alabama and a 10 percent increase in building permits over the year, offer strong promise and higher hopes for 2025.
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.
