After a year marked by recovery and recalibration, Alabama’s housing market entered the third quarter with steady momentum.

June’s peak activity softened slightly, giving way to a steadier rhythm that reflects a market finding its footing after several years of rapid change.

Q3 was the first quarter of 2025 to record fewer home sales than the same period last year — a small dip, but one that adds perspective. Following record-high summer activity in June, sales cooled modestly in July and August before leveling off in September. Rather than signaling decline, the shift points to stability — the kind that often defines a healthy, balanced market.

Here’s a recap of the state’s market activity in Q3:

The most visible change this quarter came from growing inventory and longer listing times.

Active listings climbed year-over-year each month — 19% higher in July, 15% in August, and 10% in September. Homes also remained slightly longer on the market, averaging 66, 67, and 68 days throughout the quarter, respectively. September’s days-on-market represented a nearly 10% increase year-over-year.

Together, these shifts suggest that buyers can be more selective after years of tight supply — yet sellers continue to benefit from strong home values and continued demand. 

While median sales prices experienced modest month-to-month dips early in the quarter, average prices — and overall sales volume — told a more resilient story.

• July: Median sales price of $228,759 (down 2% month over month but consistent with 2024); average sales price up 15.2% year over year.
• August: Median of $222,811 (down 2.6% month over month); average up 6.3% year over year.
• September: Median of $235,246, an 8.6% year-over-year increase and the highest median price of 2025; average sales price up 16.7% year over year.

While buyers are exercising more selectivity, average sales prices continued to rise — suggesting that overall value in the market remained strong despite a slowdown in median price growth. Sales volume reflected that same strength: September alone reached $1.7 billion in sold volume, up 15.6% year over year and marking one of 2025’s strongest months to date.

Even as homes spent more time on the market, sellers continued to see solid returns — reinforcing Alabama’s reputation for a steady, fundamentally sound housing market.

While Alabama’s housing market remains steady, the broader economic backdrop adds nuance.

Nationally, the quarter brought heightened uncertainty — including ongoing tariff discussions and signs of softening consumer confidence. Further, the quarter came to a close amid a government shutdown that has continued for nearly a month. These factors have tempered optimism and may be contributing to buyers taking a more cautious, ‘wait-and-see’ approach.

At the same time, several stabilizing forces are keeping the market from cooling further. Mortgage rates trended downward throughout the quarter — dropping from 6.56% in August to 6.26% by mid-September — and Alabama’s unemployment rate fell to 2.9%, one of the lowest in the nation. Together, those conditions have helped offset broader economic pressures and maintain balance between buyer opportunity and seller confidence.

Alabama’s housing market continues to adjust in step with consumer behavior and shifting economic forces. The rise in inventory and steadier pace of sales suggest a more sustainable environment taking shape. As the year winds down, the coming months will reveal whether seasonal trends and national economic pressures bring additional change — or reinforce the balance that has characterized much of 2025.