According to the January 2025 Alabama Economic and Real Estate Report released Feb. 20, by the Alabama Association of REALTORS, the state’s housing market saw increases in key areas, with home sales increasing by 4.6% in January compared to December and by 9.9% during the same period last year.

The median sales price in January of $219,936 also reflected a 4.2% increase from 2024 but essentially remain unchanged from December, falling by just 0.1%.

“January showed positive sales momentum, which may carry over into the early spring,” said David Hughes, economist at Alabama REALTORS. “Additionally, there are other factors hinting that there may be a busier housing market through the early part of this year. However, home buyers should not anticipate any rate relief from the Federal Reserve during the first half of the year.”

The 442 home foreclosures in January were a 14.3% decrease from 2024, but represented a slight 2.8% increase from December.

Alabama’s sold volume was $1.27 billion in January, which represents a 19.8% annual increase as well as a 5.8% month-over-month rise. The state’s 17,735 active listings at the end of January were up 27% year-over-year, indicating more options are available to start the year.

Economists noted that preliminary February indicators suggest there may be a more active real estate market in early 2025 relative to 2024.

The report surmises that home buyers are becoming acclimated to higher than usual interest rates as the average 30-year mortgage rate has remained above 6.5% for 15 of the last 18 months, and pent up demand among consumers could soon help boost the housing market across Alabama.