Alabama saw a housing market decrease in 2023, with home sales down 30.5%, marking a second consecutive year with declining sales.
However, the state was not alone. Nationally, sales declined with the National Association of Realtors characterizing 2023 as “the weakest year for existing home sales since 1995 and the biggest annual decline since 2007.”
According to the NAR, 2023 posed several challenges for home sales, with elevated mortgage rates pricing home buying out of reach for some consumers. In 2023, the average 30-year fixed rates exceeded 6% throughout the year and surpassed 7% for 17 weeks, according to the NAR.
According to the report, nationally the average-priced home at $234,075 at the median 30-year fixed mortgage rate of 6.72% in 2023 resulted in a monthly mortgage payment of $1,514, while a similar scenario in 2019 — $204,979 at 3.8% — resulted in a monthly payment of $955.
“Everyone is aware that 2023 was a rough year for real estate across the country,” said Senia Johnson, 2024 president of Alabama Realtors. “Alabama, like the rest of the nation, battled severe economic headwinds in its real estate market during the last year, but we remain confident that if current indicators continue moving in the right direction, 2024 will offer some welcome relief.”
In November 2023, the Federal Reserve decided to maintain the fed funds rate target, which prompted mortgage rates to decline over the final two months of the year. As of Jan. 18, 2024, fixed-rate mortgages had fallen to 6.6%.
In Alabama, in 2023, 76,258 home sales occurred. This is a decrease of 33,482 sales when compared to 2022. The median sales price also decreased by $10,926 compared to 2022, falling to $215,951, a decrease of 4.8%. The average days on the market for 2023 were 56.7, an increase from 2022’s average days on the market of 44.1.
The sold volume for Alabama was about $17.9 billion in 2023, a decrease of $10.3 billion from 2022. More homes in Alabama were on the market, as well, with average active listings of 11,951 units in 2023 compared to 10,399 a year ago. There also were 5,205 foreclosure filings in 2023, representing a 6.9% increase compared to the 4,871 foreclosure filings in 2022.
Alabama’s building permits for new homes also decreased by 4% in 2023 relative to 2022. This decrease was driven by fewer permits being issued during the early months of 2023 due to a backlog of homes under construction at the end of 2022. However, the building permits eased back up during the last eight months of 2023 to be relatively equal with 2022 permit numbers.
