MONTGOMERY, Ala. — Home sales in Alabama increased in November by 5.9% when compared to the previous month according to a recent report from the Alabama Association of Realtors, reversing a three-month decline in home sales seen from August through October.
Alabama’s housing market has been on a partial rebound in 2024 after experiencing significant stagnation in 2023, similar to that experienced nationwide due to increased interest rates.
“Cuts to the Fed funds rate and rising yields on the 10-year treasury note may predicate a more ‘normal’ rate environment,” said David Hughes, an economist with AAR, in a statement. “This suggests that 30-year mortgage rates are likely to remain above 6%, but even in the face of rates above 6%, median home prices have risen year-over-year for the last six months.”
According to the report, there were 5,168 homes sold in Alabama in November, up from the 4,880 sales seen in October. Year-to-date, there were a total of 57,663 home sales in the state as of November.
Despite home sales picking up in Alabama towards the later half of 2024, year-to-date home sales have still lagged behind 2023 sales, which themselves were historically low. Year to date, 2023 saw 71,274 – or 19.1% more – home sales by November.
Some housing market metrics in the November report did see improvements, however. The median home sale price, for instance, was $221,111 in November, a 2.8% increase over November 2023, and a 0.1% increase year-to-date.
Other housing market metrics in the November report represented market uncertainty.
Foreclosures decreased in November compared to the same month the previous year by 22.2%, but year-to-date, increased by 8%. The number of active home listings increased significantly, rising by 34.2% in November compared to the same month the previous year, and by 34.8% year-to-date.
Homes also remained on the market for far longer, increasing by the average number of days in November by 17.2% when compared to the previous year, and by 8.9% year-to-date.
Mortgage rates, which are heavily tied to the federal interest rates, have remained high amid the housing market’s stagnation over the past two years. By Nov. 23, the average 30-year fixed-rate mortgage increased to 6.84%, an increase of 12 basis points when compared to October.
In the report, the AAR forecasts that in December, home sales will increase by around 4.1%, that the median home sale price will increase by 0.3%, that the average days on market will increase by 10.3%, and that foreclosures will decrease by 2.6%.
The Federal Reserve projected in December that it would slow interest rate cuts in 2025, and anticipates cutting rates only twice in 2025, down from the four cuts it had projected in September. Mortgage rates, in turn, are expected to remain elevated, with Wells Fargo forecasters projecting rates to remain above 6%, and potentially fall only to as low as 6.3%.