In August, 5,935 homes sold in Alabama, a nearly 36% decline from August 2022. So far in 2023, home sales statewide are down 26.2% year to date, according to a monthly report from the Alabama Association of Realtors.
The median sales price decreased by $12,191 compared to a year ago to $232,200, an annual decrease of 5%, per the report.
The association points to interest rates as the main reason behind the slowdown. The 30-year fixed mortgage rate peaked in August at 7.23%, its highest level in more than 20 years, according to the association.
“With mortgage rates surpassing the 7% mark throughout August, it is not surprising that we are continuing to experience a dip in sales compared to previous months,” association President RaJane Johnson said in a written statement. “The higher mortgage rates have understandably influenced the decisions of prospective homebuyers, prompting them to carefully weigh their options and timing.”
Though the median price is down compared to a year ago, it has increased most months this year and $232,200 is its highest point for 2023.
“In Alabama, the cost of homeownership is significantly less than the national average. Alabama’s affordability and economic growth is what attracts buyers from other parts of the country and keeps our housing market resilient.”
The report also said:
- Foreclosures declined in August by 9.1% from the previous year, but are still up year-to-date by 5.8% to 3,216.
- There were 12,783 active listings in August, up 8.9%, and homes spent an average of 50 days on the market, up from 43 days a year ago.
- Year-to-date sales volume has declined by 33.5% to $12.9 billion.