Alabama housing market stays steady in August amid federal rate cut

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September 23, 2024

Alabama’s housing market looks to have slowed in August, but has remained steady due in part to a recent decision from the Federal Reserve to cut the federal funds rate by 50 basis points, according to the August edition of the Alabama Association of Realtors’ monthly report.

The move indicates further decreases in mortgage rates and improved affordability across the state.

“We believe the recent rate cut by the Federal Reserve is the first big step in a continuing decline in mortgage rates,” said Jeremy Walker, CEO of the Alabama Association of Realtors. “Lower rates mean more affordable monthly payments, bringing homeownership within reach for those who may have been on the sidelines due to the high mortgage rate environment of the past year.”

In August, 5,974 homes were sold, recording a year-over-year increase of 39 sales, but a 2.6% decrease month-over-month, marking the first month of declining sales since January. Sold dollar volume totaled $1.49 billion in August, up 6.41% year-over-year, but down 1.3% from the prior month.

Senia Johnson, President of Alabama Realtors Association, said she believes the rate cut will play a major role in driving the state’s housing market.

“As the traditional summer home-buying season comes to an end, so does the six-month streak of increasing home sales in Alabama,” said Johnson. “Even though different seasons bring differing levels of housing market activity, the rate reduction announcement should help buoy home sales.”

Alabama’s median sales price continued to rise, reaching $235,575 in August — an increase of 1.5% year-over-year and 1.0% month-over-month. This marks the highest median price since August 2022.

Active listings also increased for the seventh consecutive month, reaching 18,136 listings, the highest figure recorded in over four and a half years. Coupled with 4.1 months of available supply, Alabama’s current market offers ample inventory for buyers.

Additionally, average 30-year mortgage rates fell by 38 basis points in August, ending the month at 6.35%. As of September 19, rates have dropped further to a new record low of 6.09%, creating even more favorable conditions for buyers and sellers.

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

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