Alabama Economic And Real Estate Report For August Shows Dip In Home Sales But Mortgage Rate Reductions and Median Prices Improve Affordability For Buyers
September 19, 2025
Just days after an interest rate cut announced by the Federal Reserve, the Alabama Economic and Real Estate Report released by the Alabama Association of REALTORS® on Friday showed that August home sales across the state decreased by 1.7% month-over-month and 5.6% year-over-year.
“The softening labor market is a primary reason for the Fed’s interest rate cut, but while unemployment rose nationally, Alabama’s unemployment fell in July, which offers continuing evidence of a stable state economy,” Alabama REALTORS® economist Evan Moore said. “When you combine recent declines in average mortgage rates with high inventory across the state, the housing market in Alabama favors buyers.”
Alabama’s $222,811 median sales price, which represents the mid-point price realized for homes sold, experienced a drop of 2.6% month-over-month and 5.4% year-over-year.
When the recent mortgage rate reductions and median sales price declines are factored together, monthly 30-year mortgage payments for a home purchased today are $155 less than a home purchased in June, which offers additional affordability for buyers.
The sold dollar volume in August, which is the combined sales price of all homes closed during the month, was $1.69 billion — a 6.3% increase year-over-year but a 3.4% decrease from July.
Active home listings continued to rise for the seventh straight month and currently sit at a five-year high. The 20,803 homes under listing in August increased by 14.7% compared to the 18,136 in August of 2024, but higher inventory favors buyers by providing generous selection for the home that best fits their needs.
Houses remained on the market for an average of 67 days in August, which is just one day longer than July but eight days, or 18%, longer compared to the same period in 2024
Unemployment in Alabama was 3.0% in July, which is the second straight month of decline after resting at 3.3% for nine consecutive months, and it remains below the 4.2% national rate. After reaching its highest level in a decade for three straight months, Alabama’s labor force participation rate fell by a slight 0.1% to 57.9% in July and continues to lag behind the most recent 62.2% national figure.
The job sectors experiencing the most growth across Alabama are Education & Health Services, which added 1,600 jobs since June, followed by Professional & Business Services with 1,200 jobs, and Government with 400 jobs.