MONTGOMERY, Ala. — Alabama’s housing market appeared to be on a rebound in July when a total of 6,136 homes were sold across the state, a 13.1% increase over the previous month and the first year-over-year increase since January of 2022.
Compiled by the Alabama Association of Realtors, the real estate market report for July represents the state’s sixth consecutive monthly increase in home sales, a strong reversal from 2023 that saw Alabama home sales drop by more than 30% when compared to 2022.
“The July report clearly shows that Alabama’s housing market is on a solid upward trajectory,” Senia Johnson, president of Alabama Realtors, said in a statement.
Nationally, home sales reached a 30-year low last year, a 19% drop from the previous year.
“A month or two of growth is a positive sign, but six consecutive months of sales increases is an irrefutable trend that should continue as interest rate reductions take effect,” Johnson said.
Other housing market metrics improved during the month of July as well, including total sales volume, increasing over the previous month by 15.3% to $1.51 billion, and over the same month last year by 8.6%.
The median sales price increased as well, climbing by 1.9% to $233,216 when compared to June, and by 2.3% compared to July of 2023.
Compared to July of 2023, the new report also shows a dramatic increase in the number of active listings, increasing by 41.7% from 12,259 to 17,368. However, foreclosures had also increased in July when compared to the same time last year, from 402 to 447 for an increase of 11.2%.
The U.S. housing market has been in a deep sales slump dating back to 2022, when mortgage rates began to climb from pandemic-era lows, the Associated Press reported last week. Existing home sales sank to a nearly 30-year low last year as the average rate on a 30-year mortgage surged to a 23-year high of 7.79%, according to mortgage buyer Freddie Mac.
Mortgage rates have been mostly easing since reaching 7.22% in early May. This month, the average rate for a 30-year home loan has made its biggest downshift in more than a year, hovering around 6.5%.
As for the current month, the Alabama Association of Realtors forecasts continued improvement in the state’s housing market, projecting a sales increase of 9.5% by the end of August, a 1% increase in median sales price, and an 11.3% increase in sales volume.
The AAR also projects foreclosures to drop this month by 1.1%, though housing supply is projected to decrease by the end of August by 7.7%.
As of July, housing supply was greater in Alabama when compared to the same time last year, but had decreased for the past two consecutive months.
Some Alabama lawmakers earlier this year made an effort to increase the state’s housing supply by pushing for $25 million to be allocated toward the Alabama Housing Trust Fund, which was established to support the construction, renovation and maintenance of affordable housing units for low-income Alabamians.
While that effort was ultimately unsuccessful, Rep. Rex Reynolds, R-Hazel Green, chair of the House General Fund budget committee, previously told Alabama Daily News that he was open to allocating dollars toward the fund, but that he would like to identify a new, recurring revenue source to do so.
Despite a slight decrease in housing supply and increase in foreclosures during July, Jeremy Walker, chief executive officer of the AAR, said that overall, the new data painted a picture of a recovering housing market in the state, one that he predicted would only improve as interest rates drop, which recent reports suggest may be imminent.
“The consistent growth over the past six months shows that demand for homes in our state remains strong and Alabama’s economy remains robust,” Walker said in a statement.
“As the market continues to strengthen, the state remains a prime location for homebuyers and investors alike, especially when supported by an increasingly favorable mortgage rate environment.”