Alabama’s housing market slowed last month, according to the October 2024 Alabama Economic and Real Estate Report released by the Alabama Association of Realtors on Wednesday. The organization said that it believes the reduction in sales is related to rising mortgage rates and also seasonal trends.

Data gathered from Alabama’s housing market showed that 4,880 home sales had been sold during the month of October. That represents a decrease of 8.6% month-over-month and 12.8% year-over-year, marking the third consecutive month in a row of declining sales.

Elevated mortgage rates climbed to 6.72% by the end of the month creating affordability issues for first-time buyers and contributing to “rate lock” among existing homeowners who are reluctant to move.

David Hughes, Economist at Alabama Realtors, noted the drop in home sales but emphasized that they remained on a consistent level of affordability.

“Rising mortgage rates have made homeownership more challenging, particularly for first-time buyers,” said David Hughes, Economist at Alabama Realtors. “At the same time, the affordability index remained stable in October, indicating that homes are still within reach for median-income households. Along with other positive trends in the market, this stability offers a solid foundation for consumers moving forward.”

Per the data, the median sales price in October was $220,196, a 6.7% rise from last year, but a 2.1% decrease from September. This marks the fifth consecutive month of year-over-year price increases, indicating ongoing strength in Alabama’s housing market.

Additionally, Alabama’s housing market saw a positive shift in active listings, with 19,329 homes on the market at the end of October. This represents an increase of 2.7% month-over-month and 32.6% year-over-year, offering more options and favorable conditions for buyers.

The group reiterated that while they expect the housing market to slow during the winter,  seasonal trends favoring higher inventory, lower prices, and a recent cut to the fed funds rate will likely provide a buffer against further challenges affecting the market.

Austen Shipley is a staff writer for Yellowhammer News. You can follow him on  X @ShipleyAusten