August Home Sales Indicate Traditional Seasonal Downturn Has Begun But 2026 Sales Figures Remain Substantially Higher Than Previous Year
September 22, 2026
Home sales across the state began their traditional seasonal decline in August, but sales figures, prices realized, and other indicators remain substantially higher than the same period last year, according to the Alabama Economic and Real Estate Report released on Monday by the Alabama Association of REALTORS®.
“On the whole, Alabama’s residential real estate market shows strong signs of resilience, even amidst some economic headwinds,” Alabama REALTORS® economist Evan Moore said. “Month- over-month, August’s total sales, along with median and average sales prices, were down compared to July, which is consistent with seasonal expectations, but each showed impressive gains year-over-year.”
Alabama’s 6,680 home sales in August marked a substantial 10.6% increase over the same period in 2025 but a 9.3% decrease from July’s reported figures, which remains consistent with historical sales patterns as the summer buying season begins to close.
Median home prices followed the seasonal cycle, as well, with the $277,750 of August increasing by $43,936, or 18.8%, over last year’s monthly number but falling by 3.5% compared to July’s figures. The economist predicts that September’s prices will once again slightly decrease month-to-month based upon recurrent patterns and economic signals.
The sold dollar volume in August, representing the combined sales price of all homes closed during the month, was $2.19 billion, a substantial 29.6%, or $590 million, increase over the same period last year but a 10.2% reduction from July’s $2.44 billion.
The 22,365 active listings at the end of August were at their highest level since November of 2018, and new listings during the month represented the most for any August in the past five years. The 68-day average that homes remained on the market in August was one day longer than July and also one day longer than a year ago.
The increase in new and active listings resulted in housing supply rising to 4.6 months in August compared to July’s 4.1 months. The housing supply, which estimates the number of months it would take for all homes currently on the market to sell, was less than the 4.8 months of supply in August of 2025.
The average 30-year mortgage rate of 6.67% recorded in August, marking the sixth consecutive month of increase, was 8 basis points higher than the 6.59% rate of one year ago and 13 basis points higher than July’s 6.54%. The interest rate remained well below the 50-year average rate of 7.67%.
The report’s Affordability Index of Homes in Alabama, which factors in median household income, median sales prices, and average 30-year mortgage rates to specify the percentage of income necessary to afford the median home on the market, indicated that the median household in Alabama earns only 90% of the income necessary to afford the median home that sold in August of 2026.
New home building permits in July, the latest figures that are available, totaled 1,357, a 3.9% increase over July of 2025 but a reduction from June’s 1,586 permits.
According to the latest figures, Alabama’s unemployment rate in July was 3.4%, marking the fourth consecutive monthly increase and the highest number in five years, but it remains below the national rate of 4.1%. Alabama’s labor force participation rate fell slightly in July to 56.9% and marks the lowest percentage since the state recorded the same figure in March of 2023. The U.S. participation rate in June was 61.4%.
Moore said the overall picture indicates that Alabama’s home sales and real estate industry have bucked economic trends and obstacles, but rising interest rates and other factors could have increasing negative effects going forward.
“Alabama’s residential real estate market posted solid year-over-year sales gains in August, despite late-summer seasonal moderation,” the economist said. “But elevated interest rates and softening consumer sentiment could point to further cooling in the coming autumn months.”