Alabama home sales slowed in August as the summer buying season wound down, but the market remained well ahead of where it was a year ago, according to the latest report from the Alabama Association of REALTORS®.
The state recorded 6,680 home sales in August, a 9.3% drop from July but a 10.6% increase from August 2025. The month-to-month decline was consistent with historical sales patterns as the summer buying season closes.
“On the whole, Alabama’s residential real estate market shows strong signs of resilience, even amidst some economic headwinds,” Alabama REALTORS® economist Evan Moore said. “Month-over-month, August’s total sales, along with median and average sales prices, were down compared to July, which is consistent with seasonal expectations, but each showed impressive gains year-over-year.”
Home prices were also down from July but remained considerably higher than a year ago. The median sales price was $277,750, down 3.5% from July but up $43,936, or 18.8%, from August 2025. Moore expects prices to dip slightly again in September based on seasonal patterns and other economic factors.
The total value of homes sold during August reached $2.19 billion, an increase of $590 million, or 29.6%, from a year earlier. That was down 10.2% from July’s $2.44 billion.
Buyers also had more homes to choose from.
Alabama ended August with 22,364 active listings, the highest level since November 2018. New listings during the month were also the highest for any August in the past five years.
The growing number of listings pushed the state’s housing supply from 4.1 months in July to 4.6 months in August. That means it would take about 4.6 months to sell all the homes currently on the market at the current sales pace. Supply was still slightly below the 4.8 months recorded in August 2025. Homes sold during August spent an average of 68 days on the market, one day longer than both the previous month and a year earlier.
Even with more homes on the market, buying one remained out of reach for many Alabama households.
The average 30-year mortgage rate increased to 6.67% in August, the sixth consecutive monthly increase. That was up from 6.54% in July and 6.59% a year earlier, although it remained below the 50-year average of 7.67%.
The report’s Alabama housing affordability index stood at 90, meaning the median Alabama household earned about 90% of the income needed to afford the median-priced home sold during the month. The index takes into account household income, home prices and mortgage rates.
The full report also showed 714 foreclosures in August, up 26.8% from 563 a year earlier and 1.4% from the 704 reported in July. August had the second-highest monthly foreclosure total since the pandemic moratoriums, behind May 2026. Despite the increase, foreclosures remained below the 850 recorded in August 2019, before the pandemic.
The latest numbers on new home construction were mixed. Alabama issued 1,357 new home building permits in July, the latest month available, up about 4% from July 2025 but down from 1,586 permits in June.
The report also pointed to some challenges in Alabama’s economy. The state’s unemployment rate reached 3.4% in July, its fourth consecutive monthly increase and the highest rate in five years. It remained below the national rate of 4.1%. Alabama’s labor force participation rate slipped to 56.9%, its lowest level since March 2023.
Moore said Alabama’s housing market has continued to perform well despite those pressures, but warned that conditions could cool further this fall.
“Alabama’s residential real estate market posted solid year-over-year sales gains in August, despite late-summer seasonal moderation,” Moore said. “But elevated interest rates and softening consumer sentiment could point to further cooling in the coming autumn months.”
Sherri Blevins is a staff writer for Yellowhammer News. You may contact her at [email protected].
