Alabama’s housing market saw yearly sales decline 18% in 2024, according to the Alabama Association of Realtors’ yearly report.

The state’s median price increased slightly, while the number of active listings also increased, and sales declined almost 20%.

Elevated 30-year fixed mortgage rates was the most likely reason for the sales decline, as it was the second straight year with rates above 6%. Economists believe rates should remain at that level throughout 2025, as the nation continues to battle the effects of inflation.

The state’s 62,539 home sales were less than the 76,258 reported in 2023.

AAR Chief Executive Officer Jeremy Walker said the national housing market last year was one of the “most challenging” in decades, as home sales fell to their lowest level in almost 30 years.

“Roughly half of the homeowners in Alabama currently enjoy mortgage rates below 4%, and almost 70% have rates below 5%, so expecting them to abandon those rates for higher ones offers a difficult headwind for our housing market to navigate,” Walker said.

In addition:

• The median sales price increased by $793 to $216,744, reflecting a .4% increase from 2023. The 2024 median sales price was the state’s third highest annual value on record.

• The sold volume in 2024 was $14.5 billion, a decrease of $3.4 billion from 2023.

• The 16,959 average active listings in 2024 were the highest average in five years.

• There were 5,524 foreclosures in 2024, representing a 6.1% increase compared to the 5,205 foreclosures in 2023.

Alabama homes stayed on the market for an average of 63 days in 2024. The average has grown by almost two-and-a-half weeks since the shortest annual average in 2022, but remains almost 13 days below the pre-pandemic average from 2019.

The report wasn’t all doom and gloom. For example, the U.S. Census Bureau stated Alabama’s population increased by 40,026 residents in 2024, almost equaling the increase of 41,492 the previous year.

The driver has been domestic migration, with approximately 26,000 relocating to Alabama from other states in 2024. According to the Public Affairs Research Council of Alabama, the state had the seventh fastest domestic migration rate per 1,000 residents among U.S. states.

Alabama also saw a 10% increase in building permits over the year. This increase occurred as the state had more permits in 11 of the 12 months year-over-year, with the lone exception being July.