Birmingham, AL Housing Market Report

The Birmingham housing market as of December 2025 is undergoing a notable transition toward a more balanced environment, currently leaning slightly in favor of buyers. With active inventory rising by 11.47 percent year-over-year to nearly 5,000 listings, the increased supply is providing house hunters with significantly more options than in previous years. This cooling is further evidenced by the median days on market, which has climbed to 74 days, an increase of nine days compared to the same period last year. While the sale-to-list ratio remains high at 0.99, suggesting that sellers are still receiving close to their asking prices, the overall pace of the market has moderated.

Price trends in the Birmingham-Hoover metro area have shown signs of stabilization following a period of minor volatility. The median home value currently stands at $131,872, reflecting a 3.06 percent decrease over the last twelve months. Data from the second half of 2025 shows that prices peaked in October before dipping slightly through the end of the year. This downward pressure on home values contrasts with the rental market, where median rents have risen by 1.14 percent to $1,296. The divergence between falling purchase prices and rising rents suggests that while high interest rates or economic caution may be dampening buyer demand, the underlying need for housing in the region remains robust.

Looking ahead, both buyers and sellers must adjust their expectations for 2026. For sellers, the increase in inventory and longer time on market means that properties must be priced competitively and presented in top condition to stand out. The days of immediate bidding wars have largely passed. For buyers, the current climate offers a rare window of opportunity to negotiate. With prices softening and more homes to choose from, buyers have more leverage than they have had in several years. However, they should keep an eye on the rental market trends, as the continued increase in rent costs may make homeownership a more attractive long-term financial hedge despite the current stagnation in property appreciation.