MONTGOMERY, Ala. — Alabama’s housing market continued to stagnate in November, according to a new report from the Alabama Association of Realtors published on Wednesday.
Active home listings and foreclosures have continued to rise across the state, whereas home sales have decreased by 40.5% when compared to the same time last year. Reports on the months of October and September saw similar trends of increased home listings and decreased sales as high interest rates continue to deter home buyers nationwide.
A total of 5,299 homes were sold in Alabama in November, down 40.5% from November of 2022, and down 29.6% from January through November when compared to the previous year. Unsurprisingly, home sales volume was also down in November compared to the same time last year to the tune of $1 billion.
The number of active home listings rose by 17.4% in November. Foreclosures also increased by 11.9% in November compared to the same time last year, rising from 478 to 535.
Alabama is not alone in its stagnating housing market, with home sales on track this year to be at their lowest levels since 1993, largely attributed to the U.S. Federal Reserve hiking interest rates in an effort to cool inflation.
Federal Reserve has hiked interest rates 11 times since March 2022, but officials have signaled that rates will likely be reduced in 2024, giving the Alabama Realtors Association reason to be optimistic for the future.
“We are optimistic for the rate cuts potentially coming in 2024,” said Jeremy Walker, CEO of the Alabama Realtors Association. “Decreased rates would stimulate economic activity across our state, significantly benefiting our housing market while spurring increased construction of new housing.”
As of Thursday, the average 30-year fixed mortgage rate in the United States was 6.67%, the lowest such level since May. In early November, average mortgage rates peaked at 7.76%, the highest average since the year 2000.
Included in the report were also projections for December, where the association predicts that the state’s housing stagnation will likely worsen.
For the number of home listings, the association projects an increase of 2.1% between November and December. Housing supply is projected to increase by 5.6% during that same time period, and the number of home sales is projected to decrease by 4.9%. Foreclosures are projected to increase by 1.3%, from 535 to 542.
Yet with the number of home listings reaching a post-pandemic high, the Alabama Realtors Association concludes in its report that the Alabama housing market is still “poised to rebound next year” based on historical upticks in the market during spring and summer, as well as potential interest rate cuts.
Senia Johnson, president of the association, said that Alabama’s market has already seen some moderate growth, with the November report faring better than the October report in a few key areas.
Alabama’s median sales price increased in November following two months of decline to $215,018.
“As we go into 2024, it is important that buyers and sellers closely monitor the potential rebound that economists are anticipating,” Johnson said.