Affordability and Inventory Remain Steady Amidst Slowdown in Alabama’s Housing Market
November 22, 2024
According to the October 2024 Alabama Economic and Real Estate Report released on Wednesday by the Alabama Association of REALTORS®, the state’s housing market slowed in October with fewer home sales being attributed to rising mortgage rates and seasonal trends, but increases in inventory along with stable affordability provide new opportunities for consumers.
Alabama recorded 4,880 home sales in October, a decrease of 8.6% month-over-month and 12.8% year-over-year, marking the third month in a row of declining sales.
Elevated mortgage rates, which climbed to 6.72% by the end of October, are a major factor in this slowdown, stretching affordability for first-time buyers and contributing to “rate lock” among existing homeowners who are reluctant to move.
“Rising mortgage rates have made homeownership more challenging, particularly for first-time buyers,” said David Hughes, Economist at Alabama REALTORS®. “At the same time, the affordability index remained stable in October, indicating that homes are still within reach for median-income households. Along with other positive trends in the market, this stability offers a solid foundation for consumers moving forward.”
The median sales price in October was $220,196, a 6.7% rise from last year, but a 2.1% dip from last month. This marks the fifth consecutive month of year-over-year price increases, signaling ongoing strength in Alabama’s housing market.
Alabama’s housing market also saw a positive shift in active listings, with 19,329 homes on the market at the end of October. This represents an increase of 2.7% month-over-month and 32.6% year-over-year, offering more options and favorable conditions for buyers.
While the housing market is likely to remain slow during the winter months, seasonal trends favoring higher inventory and lower prices, along with a recent cut to the fed funds rate, could provide a buffer against further challenges affecting the market.
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.