It was a tough year for the nation’s housing market with states across the country reporting a slump in home sales. The Wall Street Journal reported last week that home sales in the United States fell to their lowest level in almost 30 years during 2024, citing “stubbornly high mortgage rates” resulting from the Federal Reserve’s efforts to combat persistent inflation as the reason.

In Alabama, the trend was no different. According to the newly-released 2024 Alabama Economic and Real Estate Report, the state’s 62,539 home sales in 2024 declined by roughly 18% compared to the 76,258 in 2023.

“Roughly half of the homeowners in Alabama currently enjoy mortgage rates below 4%, and almost 70% have rates below 5%, so expecting them to abandon those rates for higher ones offers a difficult headwind for our housing market to navigate,” AAR Chief Executive Officer Jeremy Walker said. “Alabama is far from alone, as the housing market across the country last year proved to be one of the most challenging in several decades.”

Per the report, homes in Alabama are retaining their value as the median sales price across the state rose just slightly to $216,744, a $793 or .04% increase from 2023. The 2024 median sales price for Alabama is the third-highest annual value on record but still represents affordability for buyers when compared to surrounding states and the rest of the nation. The 16,959 average active listings in 2024 are an increase compared to the 11,951 of 2023 and represent the highest average in five years, but higher inventory offers buyers more selection and a better opportunity to find the perfect home that fits their needs and desires.

Despite the struggles, continuing positive net migration to Alabama and a 10% increase in building permits over the year, offer higher hopes for a rebound in 2025.

Austen Shipley is the News Director for Yellowhammer News. You can follow him on X @ShipleyAusten