Alabama’s housing market held firm in September, avoiding its typical fall slowdown thanks in part to easing mortgage rates, according to the latest monthly economic and real estate report from the Alabama Association of Realtors.
“Inflation expectations increased, and consumer sentiment declined in September, but the state’s labor market remains relatively strong, and lower average mortgage rates aided with home sales,” said Alabama Realtors economist Evan Moore.
“The Fed is likely to cut rates at its remaining meetings in 2025, which may bring tightening to an end and allow the housing market more room for growth.”
The state saw 6,055 home sales in September — a 0.2% increase over August and only 71 fewer than the same time last year, a 1.2% annual decline. Economists expect sales to remain steady heading into October.
The median sales price climbed to $235,246, up $18,625 year over year — an 8.6% increase and a 0.6% monthly rise. Total sold dollar volume reached $1.70 billion, up 0.6% from August and 15% higher than 2024’s year-to-date total.
Inventory remained tight. Listings declined slightly by 0.2%, and homes stayed on the market just one day longer than in August.
Mortgage rates also offered relief to buyers. The average 30-year fixed rate dropped to 6.26% in mid-September, down 30 basis points from 6.56% at the end of August. Historically, rates have averaged around 6.52% over the past 40 years.
Alabama’s job market remained a bright spot. While the national unemployment rate rose to 4.3% in August, Alabama’s fell to 2.9%, its lowest level since June 2024 and the third consecutive monthly decline. Labor force participation ticked down slightly from 58% to 57.7%, still trailing the national rate of 62.3%.
The state added approximately 3,800 jobs in July and August, bringing total employment to 2,214,900, according to the most recent data available.
Economically, Alabama’s real GDP grew 1.2% in the second quarter of 2025 — the fifth lowest growth rate nationally and well behind the 3.8% U.S. average. The state also recorded the fifth lowest personal income growth rate.
Those figures mark a reversal from the first quarter, when Alabama ranked third in GDP growth and eighth in personal income growth.
The Alabama Association of REALTORS® represents more than 18,000 members across the state. Its monthly Economic and Real Estate Report provides data-driven market analysis for members, consumers, and policymakers.
Sherri Blevins is a staff writer for Yellowhammer News. You may contact her at [email protected].
