Alabama home sales hit four-year September high

Though month-over-month home sales continued to fall as the summer buying season drew to a close, the figures logged in September 2026 were the highest for the same period in four years, according to the Economic and Real Estate Report released Tuesday by the Alabama Association of Realtors. However, indicators point to continued economic headwinds.

“Increasing inflation, elevated Treasury yields, and hawkish Fed signals have pushed mortgage rate forecasts above 7 percent while deteriorating consumer sentiment and rising inflation expectations may create headwinds for housing demand,” Alabama Realtors economist Evan Moore said. “Even still, the Alabama economy has shown impressive endurance of late with the unemployment rate recently tapering off after increasing earlier this fall, and the state added more jobs than it lost according to the most recent data.”

Alabama’s 6,292 home sales in September represented a 3.9 percent increase over the same period in 2025 but a 5.8 percent decrease from August’s reported figures, consistent with historical and seasonal sales patterns.

The $275,333 median home price in September fell by 0.9 percent compared with August but rose by $40,087, or 14.6 percent, over last year’s monthly figure. The economist predicts that October’s median price will likely remain unchanged based on recurring patterns and economic signals.

The sold dollar volume in September, representing the combined sales price of all homes closed during the month, was $2.07 billion, a substantial increase of 21.8 percent, or $370 million, over the same period last year but a 5.5 percent reduction compared with August’s $2.19 billion.

The 22,252 active listings at the end of September were at their highest level since November 2018 and increased by 8.5 percent compared with the 20,765 listings a year earlier. The 71-day average that homes remained on the market in September was three days longer than in August and three days longer than in the same period in 2025.

The increase in active listings resulted in housing supply rising to 4.8 months in September compared with August’s 4.6 months, and the economists predict it could rise to five months by the next report. The housing supply, which estimates the number of months it would take for all homes currently on the market to sell, was slightly higher than the 4.7 months of supply in September 2025.

New home building permits in August, the latest figures available, totaled 1,392, an 11.3 percent increase over August 2025 and a 2.5 percent increase over the previous month.

The average 30-year mortgage rate of 7.28 percent recorded when the latest Alabama Association of Realtors Economic and Real Estate Report was drafted is 98 basis points higher than the 6.3 percent logged in October 2025, but it remains below the 50-year average rate of 7.67 percent.

According to the latest figures, Alabama’s unemployment rate in August was 3.4 percent, unchanged from July and well below the national rate of 4.1 percent. The leisure and hospitality industry led growth with 3,600 new jobs in August, followed by professional and business services with 1,700 jobs and manufacturing with 1,300 jobs.

Alabama’s labor force participation rate fell slightly in August to 56.8 percent, the fifth straight month of decline and the lowest percentage since the state recorded the same figure in February 2023. The U.S. participation rate in June was 61.6 percent.

Moore said the overall picture indicates that Alabama’s home sales and real estate industry continue to buck national economic trends and obstacles, but rising interest rates, continuing inflation and consumer concerns about affordability offer challenges going forward.

“While rates are likely to remain elevated, and there is pessimism nationally, the fourth quarter is a good time to buy a home in Alabama,” Moore said. “Median prices are likely to decline as sellers adjust to market realities, active listings are near multi-year highs, and homes are spending more time on the market, creating a more favorable environment for prospective buyers.”