After a rebound year in 2025, Alabama’s housing market is heading into the busy spring season with optimism. According to Alabama REALTORS® economists David Hughes and Evan Moore, the coming months are less likely to bring another surge in activity and more likely to reflect a return to typical market behavior.

Several key indicators point toward a spring housing market defined by stabilization rather than rapid growth. Below are four predictions Hughes and Moore share for Alabama’s 2026 spring housing season.

One of the clearest themes from both economists is that the housing market is settling into a more balanced cycle after years of volatility.

“Based upon the economic activity we saw last year in sales and sales prices, particularly near the end of the year, which exhibited a hotter-than-expected market, I would anticipate the Alabama residential realty market to continue with that momentum,” Hughes said.

That momentum doesn't necessarily signal a return to the pandemic-era housing boom. Moore sees the market as transitioning toward a more traditional seasonal pattern.

“While 2025 saw a notable rebound, the market is not necessarily entering a period of meaningful expansion in the sense of runaway growth,” Moore said. “The data currently suggest a recalibration toward a more balanced, traditional seasonal cycle.”

The spring market may still bring healthy activity, but buyers and sellers should expect a steadier pace compared to the rapid price growth and intense competition seen in recent years.

Mortgage rates remain one of the biggest variables influencing housing demand, and both economists believe improving borrowing conditions could encourage more buyers to reenter the market.

Hughes points to easing inflation pressures and lower borrowing costs that could help support sales activity in 2026. For many buyers who paused their home search during periods of higher rates, even modest improvements could make purchasing more feasible.

Moore echoes that outlook, noting that mortgage rates are already 80 basis points lower than they were at this time last year. If those conditions hold — or improve further — affordability margins could widen for more households, helping boost transaction volume during the spring season.

Together, those trends suggest borrowing costs could play a key role in reactivating demand from buyers who spent much of the past few years waiting on the sidelines.

After several years defined by extremely limited inventory, 2025 marked the highest volume of active listings in the past six years. Hughes predicts that this healthier supply of homes could coincide with buyers who previously delayed purchasing reentering the market. 

The increase in listings is already shifting dynamics between buyers and sellers. Months of supply have been gradually rising, approaching levels typically associated with a more balanced housing market. As a result, Moore predicts that pockets of the market could even tilt in favor of buyers later this season.

"With 5.3 months of supply in January and active listings likely to climb, the market may approach the 6-month threshold that is often mentioned as a balanced market," Moore said.

If inventory continues to grow while mortgage rates remain stable or decline, buyers may have more negotiating power than they’ve had in several years. That could translate to fewer bidding wars, more seller concessions and slightly longer decision timelines.

Despite several encouraging indicators, both economists emphasize that broader economic conditions could still influence the housing outlook this year.

Hughes points to global economic uncertainties — including trade tensions, tariffs and geopolitical conflicts — as potential factors that could disrupt market momentum.

“Macro-economic forces can always play the wildcard and disrupt an otherwise healthy economy,” he said. “I’m especially concerned about international developments and the downstream effects they can have on local economies.”
 
Moore is watching lingering risks tied to the construction sector. Preliminary data suggest that building permits for new single-family homes were down 6.1% in the fourth quarter of 2025 relative to the same period in 2024, and down 12.1% year-over-year.

If construction activity slows due to labor shortages or higher material costs, housing supply could tighten again. In that scenario, home prices could still face upward pressure even as the broader market moves toward balance.

Overall, the 2026 spring housing market in Alabama is shaping up to be less about rapid growth and more about a transition toward balance.

For buyers, that could mean more opportunities and negotiating room than in recent years. For sellers, it may require more strategic pricing and thoughtful preparation. And for real estate professionals, local market knowledge will be more important than ever as conditions evolve.