As the traditional spring and summer buying season kicked into high gear, home sales and median sales prices across the state increased both monthly and yearly in May, according to the Alabama Economic and Real Estate Report released Monday by the Alabama Association of Realtors.
“With increased listings and the average 30-year fixed rate mortgage roughly 35 basis points lower than this time last year, there is room for continuing growth in home sales throughout the summer buying season,” Alabama Realtors economist Evan Moore said. “But uncertainty in the future direction of rates and questions about whether global energy inflation will linger remain key determining factors in which way trends will move.”
The monthly report showed that Alabama recorded 6,938 home sales in May, an 11.7 percent increase over April and an 11.7 percent increase compared with the same period one year ago. Moore said the figures indicate “strong momentum” in the state’s real estate market.
At the same time, Alabama’s median home price increased 5.9 percent month over month and 16.6 percent year over year, growing by $39,670 in May to $279,185.
Sold dollar volume in May, the combined sales price of all homes closed during the month, was $2.19 billion, a 19 percent increase month over month and a 28.8 percent increase, or $490 million, compared with the same period last year.
The 21,241 active monthly listings at the end of May were 7.8 percent higher than the 19,709 listings one year ago and 1.5 percent higher than the 20,928 listings in April. Homes remained on the market for an average of 61 days, two days longer than in April and three days longer than one year ago.
Over the past 40 years, the 30-year fixed mortgage rate averaged 6.52 percent, and over the past 50 years, it averaged 7.67 percent. The May 2026 average rate of 6.44 percent remained below that historical range for the ninth consecutive month. While May marked the third consecutive monthly rate increase, the rate remained significantly below the 6.82 percent average from one year ago.
The 4.4 months of housing supply in May decreased slightly from 4.8 months in April and 4.5 months during the same period in 2025. Economists predict further reductions as the summer season continues. Housing supply estimates the number of months it would take for all homes currently on the market to sell.
According to the latest available figures, Alabama’s unemployment rate in April was 2.8 percent, a slight increase following five consecutive months at 2.7 percent, but still significantly below the national rate of 4.3 percent. Following revisions from the federal Bureau of Labor Statistics, April was the 13th consecutive month in which the state’s unemployment rate remained below 3 percent. Alabama’s labor force participation rate fell slightly in April to 57.3 percent, compared with 57.5 percent in March.
New home building permits continued a three-month trend of annual increases, with 1,612 permits in April, up 12 percent from April 2025 and 1.2 percent from March.
Though rising home prices could create affordability issues for some first-time buyers, Moore predicted that supply increases and new home construction will offer a measure of relief to those seeking to purchase a home this summer.
“Moving into June, as sales are projected to rise and mortgage rates potentially ease following the recent Islamabad MOU interim peace deal with Iran, this blend of expanding choice and rising prices will likely define the summer buying season,” Moore said.
