Huntsville, AL Housing Market Report | May 2025

Key Takeaways

First, the market overall remains relatively flat year over year in terms of new listings, pending sales, closed sales, and even affordability. Fannie Mae is projecting interest rates in the high five percent range by late 2026, and with housing supply starting to rebound, buyers may be looking at the most favorable conditions they'll see for years.

The other big story is inventory and supply. Inventory is up 22%, and supply is up 18.9% year over year. Those are now at healthy levels. If inventory continues growing at more than 20%, we could shift into a buyer’s market. With rates expected to decline, though, that could spark demand before we ever reach that point.

Huntsville, AL Housing Market Report

The median sales price stayed mostly flat, down $2,000—$340,000 versus $338,000. Homes sold were up slightly with a 2.7% increase, 723 compared to 743. The key theme here is stability.

The big shift, like in many submarkets, is inventory. There was a 26.4% increase in the number of homes on the market—2,167 versus 2,740. So there's quite a bit of inventory available before that expected demand kicks back in with potentially lower rates.

Athens, AL Housing Market Report

The Athens market tends to be more volatile month to month when it comes to median and average sales prices. It's a smaller market, so the numbers move more. May followed that pattern. The median sales price dropped $16,000—$310,000 versus $326,000. That’s not something to be too concerned about unless it continues over the next few months.

Home sales stayed flat at 224 versus 228. Inventory was up, though—1,008 homes on the market compared to 792, a 27% increase. If that continues, it could start to impact values. But again, demand is likely to grow once interest rates start coming down.

Morgan County, AL Housing Market Report

Morgan County remained mostly flat. The median sales price dropped $6,000—$250,000 versus $244,000. A lot of buyers are turning to Morgan County for affordability, and it actually became more affordable year over year.

Homes sold stayed close to last year’s numbers—143 this year versus 150 last year. The bigger shift was in inventory. There are a lot more homes to choose from: 587 compared to 367. That’s nearly a 60% increase. If that trend holds, it could start putting pressure on prices. But again, lower interest rates and increased demand—especially in more affordable areas like Morgan County—may kick in before prices drop much further.

New Listings, Pending Sales, & Closed Sales

Looking at the individual stats—new listings are basically flat year over year, down just 1.7%. We’re sitting at 1,657 new listings, which brings us back to pre-pandemic levels. That’s more in line with a healthy market. Year to date, new listings are actually up 9.7%, with over 7,700 homes hitting the market in North Alabama so far this year.

Pending sales are flat as well, with no change year over year. We had 1,133 pending sales in May both this year and last year. Year to date, we’re up 1.9% at 5,573 pending sales. That’s a solid number, especially compared to the rest of the national market.

Closed sales are up 2.8% year over year and up 3.3% year to date. That means we’ve had over 5,000 closings this year. Nationally, closed sales are down 2%, so if you compare that to our 3.3% increase, that’s a 5.3% outperformance. That’s a big deal. Just like in the stock market, you want to beat the broader market, and that’s exactly what Huntsville is doing. It continues to outperform year after year. Huntsville remains a strong place to invest, even in slower markets—and with more jobs expected to come to the area, that trend should continue.

Days on Market

With more homes on the market and demand holding steady, days on market has gone up year over year. We’re now at 59 days, which is a 28.3% increase from last year. That makes sense—when supply rises and demand stays level, homes take longer to sell.

Sellers will need to be more patient, and buyers have a bit more time to make their decisions. That’s a sign of a healthy market overall.

We’re heading into the third year of this market cycle. Most cycles last about three to five years. Right now, it looks like home sales across the U.S. will land around 4 million for the year. That’s the base level for home sales nationwide. There’s always going to be movement from life events—graduations, growing families, divorces, and deaths—which keeps a floor in place.

Fannie Mae is projecting high 5% interest rates by 2026. That points to a typical cycle playing out. A normal year usually sees around 5 million home sales. That’s where we’re likely headed by 2026 or 2027. A booming market, like we saw during Covid, pushes above 6 million.

Median Sales Price, Average Sales Price, & Percent of List Price Received

The median sales price is $315,000, down 1.5% year over year—basically flat. The average sales price is up 0.3% year over year and up 1.1% year to date, now sitting at $359,354 in Huntsville. I remember pre-pandemic, the average sales price was in the high $180,000s.

So prices in the Huntsville market have essentially doubled in just a few years. That’s a big jump, especially considering everything that’s happened—rising interest rates, global conflict, and uncertainty in the real estate market. Despite all that, prices have stayed steady. For those who’ve been predicting a crash, it’s worth pointing out that the market has already weathered a lot. With more favorable interest rates ahead and continued inflation, I believe the best buying window we’ll see for years is between now and the end of next year. The closer we get to the end of next year, the more challenging things may become for buyers.

The percent of list price received is relatively flat—97.9% year to date, 98.2% in May, down 0.3%. You generally want to see that number around 97%. I think if the data weren’t being skewed by new construction—where a builder sells a home at list price but gives $20,000 in rate buy-downs—that number would probably be just under 97%. Still, it reflects a healthy market with some room for negotiation, and homes are continuing to move.

Housing Affordability, Inventory, & Months Supply

The Housing Affordability Index is something to keep an eye on. We used to be well over 100, meaning the median household income could easily afford a median-priced home. Now we’re below that. In May, the index was at 91; year to date, it’s around 94. As interest rates come down, we should see that number move closer to 100 again.

Prices will likely increase at the same time, but we want that number to stay as close to 100 as possible. It’s important for essential workers—teachers, nurses, police officers—to be able to live where they work. Long commutes aren’t good for the community. While we’re still doing better than many comparison cities, I don’t like seeing that number in the 90s.

Inventory remains a key factor. In May 2025, there were 4,505 homes for sale, which is a 22% increase year over year. We’re now sitting at 4.4 months of supply. Technically, that’s considered a balanced market, but it’s starting to feel more like a buyer’s market.

If inventory keeps rising at this rate, we could move into a stronger buyer’s market where prices might start to come down slightly. I don’t expect that to happen. I think the Fed will act, rates will start coming down, and we’ll shift into a more balanced market again—possibly even back into a seller’s market by the end of next year.

If you're thinking about taking advantage of this market—whether buying or selling—call us today!

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