Alabama’s Housing Market Surges in May as Inventory Reaches Five-Year High
Alabama's Housing Market Heats Up in May with Strong Sales and Rising Prices
Alabama’s real estate market delivered a robust performance in May 2025, marked by significant growth in home sales, median prices, and total sales volume, according to the latest Alabama Economic and Real Estate Report from the Alabama Association of REALTORS®.A total of 6,214 homes were sold across the state in May, reflecting a 7.3% increase from April and a 6.5% rise year-over-year. The median home price climbed to $230,130, up 2.3% from the previous month and 6.7% higher—$14,510 more—than in May 2024.
Market Shift Favors Buyers as Listings Hit a Five-Year High
Despite the price increases, buyers may have the upper hand for the months ahead. The number of active listings surged to 19,709 by the end of May—a 24.9% increase compared to the 15,776 listings recorded in May 2024. This marks the highest inventory level in over five years, providing buyers with more options in a competitive market.“Home sales picked up in May in Alabama, and improving consumer sentiment in June may bode well for the housing market,” said Evan Moore, economist for Alabama REALTORS®. “Buyers continue to enjoy an increased number of listings in the state while sellers saw an increase in the median sales price in May, but market conditions will likely continue to favor buyers over the next few months.”
Total Sales Volume Sees Nearly 27% Year-Over-Year Growth
The state’s total sold volume reached $1.70 billion in May, marking a 10.4% increase over April and a 26.9% surge compared to May of last year. Meanwhile, the average home sale price rose to $274,096, reflecting a 19.7% year-over-year jump—further evidence of strong demand despite higher mortgage rates.Mortgage Rates and Market Timing
For the first time, the monthly report includes data on mortgage rates, which showed an average 30-year fixed rate of 6.82% in May. While this is higher than pandemic-era lows, it remains within the historical average range of 6.56% over the past 40 years and 7.68% over the past 50.Homes spent an average of 58 days on the market, only slightly longer than April. This indicates a relatively stable pace of sales, even as inventory continues to grow.
Alabama's Labor Market Remains Strong
Alabama’s broader economic conditions remain steady. The state unemployment rate held firm at 3.3%, maintaining that level for the eighth consecutive month and staying well below the national average of 4.2%. The labor force participation rate also increased, reaching 57.9%, its highest level in more than a decade and continuing a three-month upward trend.Outlook for the Summer Market
As the summer season progresses, the combination of higher inventory, rising prices, and stable economic indicators suggests that Alabama's housing market may continue to grow—albeit with increased competition and a favorable climate for buyers.The Alabama Economic and Real Estate Report is compiled monthly by the Alabama Association of REALTORS®, representing over 19,000 members across the state and serving as a key resource for real estate professionals, policymakers, and consumers alike.
