Inventory Up, Prices Climbing
Alabama “Hot Market” Update: May 2025 Real Estate Performance
May brought remarkable momentum to Alabama’s housing market. The state saw 6,214 homes sold, marking a 7.3% increase over April and a 6.5% jump year-over-year from May 2024. That's a telling sign of renewed consumer confidence and demand across the state.
Median and Average Prices Surge
Home values are also on the rise. The median sales price hit $230,130 in May—up 2.3% month-over-month and 6.7% above May 2024 (a $14,510 annual gain). Even more striking, the average sale price reached $274,096, representing a nearly 20% increase compared to last year .
Sales Volume Reflects Strength
Total sales volume for May hit $1.70 billion, a 10.4% monthly increase and an impressive 26.9% increase year-over-year. If you're wondering whether that’s a sustained trend—yes, and then some.
Rising Inventory Gives Buyers Leverage
One key highlight: active listings climbed to 19,709—a 24.9% increase from last year’s 15,776 . That marks the highest inventory level in at least five years, offering buyers more choice and negotiation power. In fact, May saw homes sit on the market an average 58 days, roughly one day longer than April
Mortgage Rates: Historically Moderate
Meanwhile, 30-year fixed mortgage rates averaged 6.82% in May, remaining within the lower range of long-term averages (ranging 6.56% to 7.68%). That rate environment helps keep borrowing realistic for many buyers.
Solid Economic Fundamentals
Supporting the housing market’s success is Alabama’s stable economic backdrop. The state’s unemployment rate stayed at 3.3%—consistent for eight months and well below the 4.2% national average. Plus, the labor force participation rate climbed to 57.9%, the highest level in over a decade
What It All Means
For Sellers: With strong price growth and a healthy market, May was a prime month to list.
For Buyers: Elevated inventory levels increase options and room to negotiate.
For REALTORS®: Sustained economic stability and reasonable mortgage rates suggest a balanced market moving into summer.
Takeaway for Clients
Alabama’s housing market is showing signs of strength and stability. Trending sales, rising prices, yet still-favorable borrowing costs and ample inventory create a dynamic where both buyers and sellers can benefit. Whether expanding a portfolio or entering the market, now is a compelling time.
