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Alabama Economic 2025 Annual Report
A L A B A M A R E A L T O R S . C O M
& Real Estate ReportALABAMA ECONOMIC & REAL ESTATE REPORT
2025 ANNUAL ALABAMA ECONOMIC AND REAL ESTATE REPORT
KEY TAKEAWAYS
• Alabama had 71,485 home sales in 2025. This is an increase of 2,656 sales when compared to 2024.
• The median sales price increased by $23,165 compared to 2024, rising to $233,969. This is an annual increase of 11.0%.
• The sold volume was $19.37 billion in 2025, an increase of $3.27 billion from 2024. This is approximately a 20.3% annual
increase.
• The 19,744 average active listings in 2025 are an increase compared to the 16,786 of a year ago. This is the highest average
in 6 years yet remains below the 2019 pre-pandemic average of 20,478.
• There were 6,039 foreclosures in 2025 representing a 9.3% increase compared to the 5,524 foreclosures in 2024.
ALABAMA ANNUAL HOUSING MARKET SUMMARY
2021 2022 2023 2024 2025 ’24-‘25
’24-’25
Change
% Change
Sales 137,884 111,850 78,605 68,829 71,485 2,656 3.9%
Median Sales
Price ($) 210,026 226,162 219,329 210,804 233,969 23,165 11.0%
Average Sales
Price ($) 251,561 256,630 234,075 233,322 270,603 37,281 16.0%
Sales Volume
($ billions) 34.72 28.74 18.41 16.10 19.37 3.27 20.3%
Average Days
on Market 45 44 57 63 69 6 9.5%
Median Active
Listings 8,433 9,768 12,536 16,786 19,744 2,958 17.6%
Median Months
of Supply 1.3 1.7 2.6 3.9 4.7 0.8 20.5%
Total
Foreclosures 2,613 4,871 5,205 5,524 6,039 515 9.3%
2025 ANNUAL REPORT 1ALABAMA ECONOMIC & REAL ESTATE REPORT
ECONOMIC OVERVIEW
The nation’s real gross domestic product (GDP) experienced a volatile but ultimately strong trajectory in PQPR, reaching an estimated
annual growth rate of S.Q%, up from P.T% in PQPU. In the first quarter of PQPR, real GDP decreased at an annual rate of Q.X%, a sharp
downturn from the Y.Z% growth seen in the fourth quarter of PQPU. However, the economy rebounded aggressively in the following
months, with growth climbing to S.T% in the second quarter and surging to U.U% in the third quarter, marking the strongest advance in
two years.
Alabama’s annualized real GDP growth rate in the third quarter was U.^%, which was higher than that of the nation. Also, during the
third quarter, nominal personal income grew S.S% across the country and at S.S% in Alabama. Current dollar per capita income has
increased in Alabama during every quarter since the second quarter of PQPY, rising from $UZ,PQZ to $RZ,TYP.
Note that fourth quarter data at the state level is not available at the time of this writing, nor has the national rate been released.
JOBS
Alabama added jobs in seven of the twelve months in 2025, increasing the total number of jobs approximately 10,900 since last
December. Annual job growth slowed for the fourth consecutive year and fell below the annual growth of 24,800 jobs in 2019 (pre-
pandemic).
Total Jobs in Alabama (Thousands)
Leisure & Hospitality led job growth over the year, adding 6,600 jobs, followed by Education and Health Services which added 5,600
jobs.
Additionally, Construction added 3,400 jobs since December 2024. The largest sectors of the state’s economy in 2025 were
Government (421,000 jobs), Trade, Transportation, and Utilities (407,900 jobs), and Manufacturing (287,100 jobs). Sectors which lost
jobs since December 2024 include Trade, Transportation, and Utilities losing 2,500 jobs, Financial Activities losing 2,300 jobs, and
Professional & Business Services, which lost roughly 1,600 jobs.
2025 ANNUAL REPORT 2ALABAMA ECONOMIC & REAL ESTATE REPORT
Alabama Jobs Changes from 2024 to 2025
EMPLOYMENT
Alabama had some of the lowest monthly unemployment rates in the country in 2025, with rates below 3% for the last six months of the
year. The rate was 3.3% for the first five months of the year before beginning a steady decline in June, then ending the year at 2.7% in
November and December. This resulted in the state having the fifth lowest unemployment rate in the country to end the year.
Additionally, the state’s unemployment rate in December 2025 was 1.7 percentage points below the national unemployment rate of
4.4%.
Alabama’s labor force participation rate ticked slightly higher over the past year, from 57.7% in December 2024 to 57.8% in December
2025. From April through June 2025 the rate reached 58.0%, which was the highest level for the state’s labor force participation rate
over the last decade.
Alabama’s initial jobless claims, which serve as an indicator of real time economic conditions, declined for the fifth consecutive year.
There were 192 fewer claims weekly on average, or 8.5% fewer, in 2025 relative to 2024, reflecting a strengthening statewide economic
climate. For pre-pandemic reference, there were 437 fewer weekly claims on average in 2025 compared to 2019. Furthermore, the
average weekly initial jobless claims declined for the second consecutive quarter in the fourth quarter of 2025 to 2,011 weekly claims.
The national economy did not fare as well with initial jobless claims increasing for the third consecutive year in 2025, with average
weekly claims 1.4% higher relative to 2024. However, like the state, claims fell nationally in the third and fourth quarters of 2025.
MIGRATION
Alabama’s population increased by 30,033 in 2025 according to the U.S. Census Bureau, following an increase of 45,205 in 2024.
Once again, the recent increase was driven by domestic migration, with 23,358 people moving from other states to Alabama in 2025.
This is the 16th fastest rate per 1,000 people in terms of domestic migration among U.S. states. Additionally, according to United Van
Lines “Annual Movers Study,” Alabama ranked ninth in terms of inbound migration in 2025. The state ranked ninth nationally according
to U-Haul’s growth rates, up from 16th in 2024.
2025 ANNUAL REPORT 3ALABAMA ECONOMIC & REAL ESTATE REPORT
MORTGAGE RATES
Average 30-year mortgage rates remained above 6% throughout 2025, marking the third consecutive year with average rates above
6%. However, the average 30-year fixed rate mortgage generally declined throughout the year from a peak of 7.04% in mid-January (18
basis points below 2024’s peak of 7.22%) to 6.15% by the end of the year. The average rate has declined by over 170 basis points
relative to the 7.79% of late October 2023, with the average 30-year fixed mortgage rate falling to 6.06% as of January 15, 2026.
U.S. Fixed-Rate Mortgage Averages
2025 ANNUAL REPORT 4ALABAMA ECONOMIC & REAL ESTATE REPORT
HOUSING MARKET OVERVIEW
The average 30-year fixed rate mortgage has been at least 6% since mid-September 2022. However, market participants are
acclimating to the higher rate environment and 2025 saw more sales than 2024. Monthly sales climbed through the first quarter of the
year, leveled off a bit before peaking in June, then slowly trended downwards through the end of the year. Each of the first six months
of the year saw higher year-over-year sales, as did the last two months of the year. The median sales price increased slightly relative to
2024 by $23,165, or 11.0%, while days on market climbed for the third consecutive year to 69 days. While Alabama saw an increase of
3.9% in sales in 2025, the nation experienced a very slight decline as home sales fell from 4.062 million in 2024 to 4.061 million in
2025. According to the National Association of REALTORS®, 2025 sets a new record, superseding 2024, as the weakest year for total
home sales since 1995.
HOME SALES PRICES
Even though the median home sales price increased in PQPR, housing in Alabama remains a bargain when compared to the South as a
region and the nation. The difference in prices has increased not only in an absolute sense, but in percentage terms as well. For
example, median prices increased by $X^,QXS, or UQ.P%, between PQYZ and PQPR in Alabama. For the South, the increase was
$YPT,SRQ, a RU.U% increase, while for the nation prices increased $YUS,TQQ or RS.Q% over the period.
Median Home Sales Price Comparisons
FORECLOSURES
Foreclosure activity increased in the United States in 2025 following the decline in 2024. National foreclosure activity is up 14% relative
to 2024. There were 367,460 filings in 2025 nationwide, with 322,103 in 2024 and 357,062 in 2023. The number of foreclosures for
each of the last six years remains well below the 493,066 filings in 2019.
Alabama foreclosure activity rose to its highest level in six years in 2025. Foreclosure filings were up 9.3% relative to 2024 and up
13.8% relative to 2023. However, foreclosure in activity in the state remains well below what it was in 2019.
Foreclosure activity generally trended upward for much of the year. For example, during the first quarter of 2025 there were 432
foreclosures per month, with the average climbing over the next two quarters to 555 foreclosures per month in the third quarter.
However, the average declined to 502 foreclosures per month in the fourth quarter.
2025 ANNUAL REPORT 5ALABAMA ECONOMIC & REAL ESTATE REPORT
H O U S I N G M A R K E T O V E R V I EW
TOTAL HOME SALES
The number of sales transactions that closed
during the year
Alabama home sales activity increased in 2025
following three consecutive years of decline.
There were 71,485 sales during 2025, which is
2,656 more sales than 2024. This represents a
3.9% increase in annual sales. Year-over-year
home sales were higher in eight of the 12
months of the year, with exceptions from July
through October. Home sales dipped slightly,
remaining flat, at the national level. Alabama’s
housing market was able to maintain sales
momentum even as it faced the same high-
interest-rate environment that stifled growth on
a national level.
Alabama Annual Home Sales Figures
Year Sales Percent Change
Year-over-Year
2025 71,485 3.9%
2024 68,829 -12.4%
2023 78,605 -29.7%
2022 111,850 -18.9%
2021 137,884 21.8%
2020 113,165 2.2%
2019 110,772 7.4%
Alabama Home Sales, Annual Figures
Alabama Home Sales, Monthly Figures
2025 ANNUAL REPORT 6ALABAMA ECONOMIC & REAL ESTATE REPORT
H O U S I N G M A R K E T O V E R V I EW
MEDIAN SALES PRICE
Measures the “middle” price of homes that sold
(half of the homes sold for a higher price, and
half sold for less)
Alabama Median Sales Prices Annual Figures
Year Median Sales
Price ($)
Percent Change
Year-over-Year
2025 $233,969 11.0%
The median Alabama residential sales price
increased by 11.0% in 2025, while the national
median price increased by 1.7% relative to 2024.
The 2025 median sales price for Alabama is the
highest annual value on record. Additionally, the
October 2025 median value of $253,201 marks
the highest monthly value. Pent up demand,
positive net migration, and fewer new home
permits contributed to a higher median price.
2024 $210,804 -3.9%
2023 $219,329 -3.0%
2022 $226,162 7.7%
2021 $210,026 12.0%
2020 $187,442 12.3%
2019 $166,906 2.9%
Alabama Median Sales Prices ($), Annual Figures
Alabama Median Sales Prices ($), Monthly Figures
2025 ANNUAL REPORT 7ALABAMA ECONOMIC & REAL ESTATE REPORT
H O U S I N G M A R K E T O V E R V I EW
Alabama Average Sales Prices Annual Figures
AVERAGE SALES PRICE
The sum of all sales in dollars divided by the
number of homes sold
Year Average Sales Price ($) Percent Change
Year-over-Year
2025 $270,603 16.0%
2024 $233,322 -0.3%
The average, or mean, Alabama residential
sales price experienced an increase of 16.0%
in 2025 relative to 2024. Like the median
sales price, the average sales price climbed
to its highest annual level exceeding, the
previous annual high in 2022. The average
price is more than $65,000 higher than the
pre-pandemic average.
2023 $234,075 -8.8%
2022 $256,630 2.0%
2021 $251,561 14.1%
2020 $220,380 7.5%
2019 $204,979 1.8%
Alabama Average Sales Prices ($), Annual Figures
Alabama Average Sales Prices ($), Monthly Figures
2025 ANNUAL REPORT 8ALABAMA ECONOMIC & REAL ESTATE REPORT
H O U S I N G M A R K E T O V E R V I EW
Alabama Annual Sales Volume (in Billions)
SALES VOLUME
Measures the combined sales price of all
homes that closed during the year
Year Sales Volume (in
$ Billions)
Percent Change
Year-over-Year
2025 $19.37 20.3%
The sold dollar volume for residential sales in
2025 was $19.37 billion, which is up
approximately $3.27 billion from 2024. This
represents a 20.3% increase, driven by the
increase in the average sales price and by
the increase in sales. This marks the highest
sales volume in three years.
2024 $16.10 -12.5%
2023 $18.41 -35.9%
2022 $28.74 -17.2%
2021 $34.72 38.8%
2020 $25.01 10.0%
2019 $22.73 9.2%
Alabama Sales Volume (in Billions), Annual Figures
Alabama Sales Volume (in Billions), Monthly Figures
2025 ANNUAL REPORT 9ALABAMA ECONOMIC & REAL ESTATE REPORT
H O U S I N G M A R K E T O V E R V I EW
Alabama Annual Median Days on Market
DAYS ON MARKET
Measures how long it takes a home to sell
after it has been listed on the market
Year Median Days on
Market
Percent Change
Year-over-Year
2025 69 9.5%
Alabama homes stayed on the market for 69
days on average in 2025. The average days
on market has grown by almost three and a
half weeks since the shortest annual average
in 2022. but remains six days below the pre-
pandemic average of 2019. The lowest
average days on market occurred in April
2025 at 57 days, down from the year starting
with an average of 84 days in January. The
year ended with 78 average days on market
in December 2025.
2024 63 10.5%
2023 57 29.5%
2022 44 -2.2%
2021 45 -33.8%
2020 68 -9.3%
2019 75 0.0%
Alabama Residential Days on Market, Annual Figures
Alabama Residential Days on Market, Monthly Figures
2025 ANNUAL REPORT 10ALABAMA ECONOMIC & REAL ESTATE REPORT
H O U S I N G M A R K E T O V E R V I EW
SUPPLY
Estimate of the number of months it will take
for all homes listed on the market to sell
Alabama Annual Months of Supply
Year Median Months
of Supply
Percent Change
Year-over-Year
2025 4.7 20.5%
Annual growth in supply levels continued in
2025, as there were about 4.7 months of supply
on average. This is almost a month higher than
the 3.9 average months of supply in 2024 and
the fourth consecutive year of increases.
Additionally, this is the highest average monthly
supply in at least eight years. Recently, the
monthly supply climbed to a peak of 4.9 months
in October and closed the year at 4.7 months in
December 2025.
2024 3.9 50.0%
2023 2.6 52.9%
2022 1.7 30.8%
2021 1.3 -40.9%
2020 2.2 -8.3%
2019 2.4 -14.3%
Alabama Months of Supply, Annual Figures
Alabama Months of Supply, Monthly Figures
2025 ANNUAL REPORT 11ALABAMA ECONOMIC & REAL ESTATE REPORT
H O U S I N G M A R K E T O V E R V I EW
RESIDENTIAL LISTINGS
The number of properties listed on
the market during the year
Alabama Annual Active and New Residential Listings
Year Median Active
Listings
Percent Change Year-
Median New
Percent Change
over-Year
Listings
Year-over-Year
2025 19,744 17.6% 6,813 2.0%
Average active listings increased for the
fourth consecutive year in Alabama. There
were 19,744 median active listings in 2025
compared to 16,959 in 2024, which
represents a 17.6% increase. The fewest
listings of the year occurred in January
followed by monthly increases through most
months reaching a peak of 20,866 in October.
The trend of increases in average annual
listings have led to the highest average level
in six years.
2024 16,959 41.9% 6,681 6.4%
2023 11,951 14.9% 6,277 -12.2%
2022 10,399 22.5% 7,148 -2.5%
2021 8,492 -41.1% 7,331 2.6%
2020 14,429 -29.5% 6,588 -5.8%
2019 20,478 -11.8% 6,996 -3.5%
Alabama Median Active and New Residential
Listings, Annual Figures
Alabama Active Residential Listings,
Monthly Figures
2025 ANNUAL REPORT 12ALABAMA ECONOMIC & REAL ESTATE REPORT
H O U S I N G M A R K E T O V E R V I EW
FORECLOSURES
Homeowners failing to pay their mortgages,
resulting in lender repossessed homes or
foreclosure auctions
Alabama Foreclosures Annual Figures
Year Total
Foreclosures
Percent Change
Year-over-Year
2025 6,039 9.3%
2024 5,524 6.1%
The 6,039 properties with foreclosure filings in
2025 represent 0.26% of all Alabama housing
units, which is in line with the 0.26% of national
properties with foreclosure filings for the year.
2023 5,205 6.9%
2022 4,871 140.0%
2021 2,613 -50.8%
2020 5,308 -48.5%
2019 10,307 -18.7%
Alabama Residential Foreclosures, Annual Figures
Alabama Residential Foreclosures, Monthly Figures
2025 ANNUAL REPORT 13ALABAMA ECONOMIC & REAL ESTATE REPORT
H O U S I N G M A R K E T O V E R V I EW
NEW HOME BUILDING PERMITS
Permits for construction of new one-unit
residential homes owned by individuals
Building permits for one-unit structures, i.e.,
new homes, decreased by 8.2% during the
first 10 months of 2025 relative to the same
period in 2024. Note that data for November
and December 2025 are not available at the
time of this writing due to the government
shutdown. This decrease occurred as the
state had fewer permits in eight of the 10
months year-over-year, with exceptions in
January and March. Nationally, permits are
down 7.1% over the same period.
Alabama New Home Building Permits Annual Figures
Year Permits Percent Change
Year-over-Year
2025* 13,767 -19.2%
2024 17,047 10.1%
2023 15,477 -8.8%
2022 16,972 -5.4%
2021 17,950 10.5%
2020 16,245 18.0%
2019 13,767 6.4%
*Data available only through October 2025
Alabama New Home Building Permits, Annual Figures
*Data available through October 2025
Alabama New Home Building Permits, Monthly Figures
2025 ANNUAL REPORT 14ALABAMA ECONOMIC & REAL ESTATE REPORT
H O U S I N G M A R K E T O V E R V I EW
AAR’s Forecast
Mortgage rates remained a central factor in 2025, with average 30-year fixed rates declining from a peak of
7.04% in mid-January to 6.15% at the end of December, and averaging 6.60% for the year. While the Federal
Reserve (the Fed) began its rate-cutting cycle in late 2024 and continued in late 2025, these moves had a gradual
impact on the mortgage market, with rates only beginning to show a meaningful decline toward the 4th quarter
of 2025.
Heading into 2026, industry experts project rates to settle between 6-6.50%, with the possibility of rates below
6% if inflation drops or the economy cools.
Factors to consider in the near term:
• The %&-year Treasury yield, which averaged 5.78% in 7&7;, continues to dictate the floor for mortgage pricing.
Although the Fed officially ended its quantitative tightening regarding Treasury holdings on December %, 7&7;, it is
continuing to allow mortgage-backed security (MBS) holdings to roll off its balance sheet. This will likely keep the
spread between Treasury yields and mortgage rates wider than historical norms through the first half of 7&7L.
Economic growth remains resilient, but uncertainty regarding fiscal policy and global trade, specifically potential
tariffs, continues to provide upward pressure on long-term yields.
• However, a significant development in early 7&7L was the presidential directive for Fannie Mae and Freddie Mac
to purchase $7&& billion in mortgage-backed securities. This policy aims to narrow the mortgage spread and
provide relief to a market that has seen the Fed’s quantitative tightening exert upward pressure on rates for
several years. While this intervention contributed to a dip in rates to start 7&7L, its long-term impact will depend
on whether it can successfully offset the Fed’s MBS roll off.
• The rate lock effect persists for many Alabamians, as a significant portion of homeowners still hold mortgage
rates below the current market. However, after three consecutive years of decline, Alabama home sales activity
reversed course in 7&7;, increasing by S.8% to a total of T%,5U; units. This rebound indicates that buyers are
increasingly adjusting to the “new normal” of L% interest rates.
• While median and mean home prices in Alabama rose in 7&7;, the state maintains a distinct affordability
advantage compared to the South and national averages. However, the supply side of the market is entering a
new phase of constraint. After a peak in 7&75, building permits for new single-family units in Alabama declined by
roughly U% through October 7&7; (the most recent data available). This reduction suggests that the supply of
new construction may tighten in 7&7L, potentially shifting the market balance back toward existing inventory or
placing further upward pressure on prices.
• Looking toward 7&7L, signs remain cautiously optimistic for the Alabama housing market. The state continues to
be a leader in the Southeast for net migration, recently ranking as the ninth most “moved to” state in the country.
With inventory levels starting the new year higher than in previous cycles and mortgage rates lower than those of
much of the previous three years, Alabama is well-positioned to sustain the growth momentum established over
the past twelve months.
2025 ANNUAL REPORT 15Alabama REALTORS® Economic and Real Estate Report
The Alabama Association of REALTORS® (AAR) is the largest statewide organization of real estate
professionals comprised of over 19,000 members from 23 boards and 1,200 real estate companies.
United by adherence to a Code of Ethics, our members work as real estate professionals in the
sale, lease, appraisal, management and development of residential, commercial, rural and resort
properties throughout Alabama.
All inquiries regarding this report may be directed to:
Abby Wilson, Director of Marketing & Communications
abby@alabamarealtors.com (334) 386-5645
The goal of AAR’s Economic and Real Estate Report is to produce timely, data driven economic
and market analysis, authoritative business intelligence to serve members, and inform
consumers, policymakers and the media in a professional and accessible manner.
Analysis provided by the Alabama Association of REALTORS® Research Team:
David Hughes, Associate Professor, Ph.D.
University of Louisiana at Lafayette
Evan Moore, Professor, Ph.D.
Auburn University Montgomery
The numbers and figures in this report are drawn from numerous government and proprietary data
sources and represent best information at the time of release. Information is deemed reliable but
not guaranteed. As new data emerges, the Alabama Association of REALTORS® may, from time to time,
update these figures to reflect more recent information.
A L A B A M A R E A L T O R S . C O M
