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labama's economy shone brightly in 2024, boasting low unemployment and sustained job growth. However, its housing market faced a different reality, mirroring the national trend of struggle. According to the Alabama Association of REALTORS' Annual Report, released this week, home sales plummeted by nearly 18% last year, with just 62,539 transactions compared to 76,258 in 2023.

    Economists attribute this decline to stubbornly high mortgage rates, which remained above 6% throughout the year. This is the second consecutive year of such rates, and forecasts suggest they will persist into 2025. "It's a tough sell for homeowners to abandon their current low rates for higher ones," said Jeremy Walker, AAR CEO. "Alabama isn't alone in this challenge; the national housing market faced one of its toughest years in decades."

    Despite these headwinds, Alabama homes retained their value, with the median sales price rising just 0.04% to $216,744 – a modest increase from 2023. This represents the third-highest annual median sales price on record and remains relatively affordable compared to surrounding states.

    A silver lining emerged in the form of increased inventory, with an average of 16,959 active listings in 2024 – the highest level in five years. This surge offers buyers more options and a better chance of finding their dream home. Other promising statistics include a 10% increase in building permits and continued positive net migration to Alabama, hinting at brighter prospects for 2025.

    The Alabama Economic and Real Estate Report is published monthly by the Alabama Association of REALTORS, providing valuable insights into the state's economic landscape.