Alabama, July 23, 2025
News Summary
Alabama’s housing market is witnessing a substantial appreciation in home values amid rising inventory and challenging economic conditions. The median home price has increased while home sales are on the rise, indicating a recovery trend across various metro areas, especially Birmingham-Hoover. Key cities are showing impressive growth rates in home values, signaling a robust market for both buyers and investors.
Alabama Housing Market Sees Significant Value Increases Amid Record Home Prices
Alabama’s housing market is experiencing a wave of significant appreciation, with home values on the rise amidst ongoing economic developments and a burgeoning inventory. In June 2025, the typical home value in the U.S. reached $367,369, a slight 0.2% increase from the prior year. In Alabama, values are showing even more pronounced growth across various metro areas, reflecting a robust recovery in the local housing sector.
Despite challenges such as soaring mortgage rates—currently at 6.75% for a 30-year fixed-rate mortgage—the median home price in Alabama rose by 1.4% in June 2025 to $233,458. This is a 2% increase when compared to June 2024. This uptick coincides with an 8.2% rise in home sales from May 2025 and a notable 10.9% increase year-on-year, indicating a favorable trend for prospective homebuyers.
The Birmingham-Hoover metro area is home to the majority of Alabama’s most expensive properties, boasting ten cities in the top 30 rankings by the Zillow Home Values Index. Other contributing metro areas include Daphne-Fairhope-Foley, Alexander City, Huntsville, Montgomery, Cullman, Auburn-Opelika, LaGrange, and Mobile.
Key Areas and Value Changes
Several cities have experienced significant growth in home values over the past year and over five years:
- Huntsville: Typical home value of $339,281 with a 1.9% one-year increase and a 46.7% five-year increase.
- Daphne-Fairhope-Foley: Typical home value of $339,837 with a year-on-year price change of +2.4% and +55.6% over five years.
- Birmingham-Hoover: Homes average $339,963, posting a 0.8% increase in the last year and 36.7% over five years.
- Montgomery: With typical home values at $355,114, Montgomery saw a 3.2% increase this year and a 41.9% increase over the last five years.
Homes in Birmingham-Hoover have notably high values, up to $988,046, indicating the region’s property market strength.
Market Recovery and Economic Conditions
Alabama’s housing market is benefiting from favorable economic conditions, with GDP growth and rising personal income levels contributing positively to home sales. As of June 2025, there were 20,298 active listings, marking a 22.7% increase from the previous year—this is the highest inventory level seen in five years. However, home sales still fall short of pre-2024 benchmarks, suggesting that ongoing recovery is essential.
The average home spent 63 days on the market in June, longer than the previous year, indicating that increased competition and inventory could favor buyers moving forward, contrasting with previous years’ low inventory that favored sellers.
Alabama continues to report a steady unemployment rate of 3.3%, lower than the national average of 4.2%. This economic stability further supports the positive trajectory of the housing market.
Conclusion
Overall, Alabama’s housing market shows signs of recovery and growth, driven by rising values and more inventory. While high mortgage rates pose challenges, the continuous upward trend in home prices underscores the state’s potential as a viable investment opportunity for homebuyers and real estate investors alike.
Frequently Asked Questions
What is the current typical home value in Alabama?
The typical home value in Alabama reached $355,114 as of June 2025.
Which city in Alabama has the highest typical home value?
Homes in the Birmingham-Hoover area can reach values up to $988,046, making it one of the most expensive regions in Alabama.
How much did home prices increase in Alabama over the past year?
The median price of homes in Alabama increased by 1.4% in June 2025 compared to the previous year.
Are home sales increasing in Alabama?
Yes, home sales in Alabama increased by 8.2% from May 2025 and by 10.9% year-over-year as of June 2025.
Key Features of Alabama’s Housing Market
| City | Typical Home Value | 1-Year Price Change | 5-Year Price Change |
|---|---|---|---|
| Huntsville | $339,281 | +1.9% | +46.7% |
| Daphne-Fairhope-Foley | $339,837 | +2.4% | +55.6% |
| Birmingham-Hoover | $339,963 | +0.8% | +36.7% |
| Montgomery | $355,114 | +3.2% | +41.9% |
Deeper Dive: News & Info About This Topic
HERE Resources
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Birmingham’s Top Neighborhoods: A Ranking of Best Places to Live
Alabama Real Estate Market Experiences Surge in Listings
Birmingham’s Remarkable Transformation Through Personal Lens
Nationwide Property Taxes Surge by 10.4%
New Real Estate Listings Available in Birmingham Area
Birmingham’s Neighborhood Revitalization Efforts Yield Positive Change
Birmingham Sees Surge in Job Opportunities Across Industries
Additional Resources
- Alabama Economic and Real Estate Report
- The Bama Buzz: Alabama Home Prices & Sales
- Montgomery Advertiser: Real Estate Listings
- 1819 News: Alabama Home Sales Decline
- WSFA: Alabama Home Sales & Prices Report
- Wikipedia: Real Estate
- Encyclopedia Britannica: Real Estate
- Google Search: Alabama Housing Market
- Google News: Alabama Real Estate
- Google Scholar: Alabama Housing Market
Author: STAFF HERE BIRMINGHAM WRITER
The BIRMINGHAM STAFF WRITER represents the experienced team at HEREBirmingham.com, your go-to source for actionable local news and information in Birmingham, Jefferson County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Sidewalk Film Festival, Sloss Music & Arts Festival, Magic City Classic, and civil rights commemorations. Our coverage extends to key organizations like the Birmingham Business Alliance and the Birmingham Civil Rights Institute, plus leading businesses in healthcare, finance, and manufacturing that power the local economy such as UAB Medicine, Regions Bank, and Encompass Health. As part of the broader HERE network, including HEREHuntsville.com, we provide comprehensive, credible insights into Alabama's dynamic landscape.
