New home sales in Alabama during May increased 4.2% year-over-year from 912 to 950 closed transactions. Following seasonal trends, sales increased 16.9% from April. New home sales are up 1.5% year-to-date.
Inventory: New home listings (3,393) increased 6.5% from April but decreased 4.3% from one year ago. The number of new home listings in May increased significantly from recent years, rising 35.8% from the 5-year average.
At the current sales pace, all the active inventory on the market would sell in 3.6 months, down from 3.9 in April and May 2024. The equilibrium point where buyers and sellers have roughly equal bargaining power is 6 months of supply.
Pricing: The median sales price for new construction in May was $316,799, an increase of 0.5% from April but a decrease of 0.9% from one year ago.
The differing sample size (number of residential sales of comparative months) can contribute to statistical volatility, including pricing. ACRE recommends consulting with a local real estate professional to discuss pricing, as it will vary from neighborhood to neighborhood.
New homes sold in May averaged 61 days on the market (DOM), 5 days slower than one year ago. Average DOM is expected to remain in the 60 to 80-day range for the foreseeable future.
Building Permits for New Single-Family Units: Permits for new SF units in Alabama decreased 22.2% year-over-year from 1,736 to 1,350 units. Permits are down 9.0% year-to-date.
Single Family Housing Starts: Housing starts decreased 14.4% year-over-year from 1,637 to 1,401 units. Housing starts are down 4.9% year-to-date.
National Overview: According to the U.S. Census Bureau, new home sales nationwide were at a seasonally adjusted annual rate of 623,000 in May. This represents a 13.7% decrease from the revised April rate of 722,000 and is 6.3% below the May 2024 level of 665,000.
The median sales price for new homes ($426,600) increased 3.7% from April and 3.0% from May 2024.
The supply of new homes was estimated at 507,000 listings (seasonally adjusted) in May, a decrease of 1.4% from April and an increase of 8.4% from one year ago.
The national new home market had 9.8 months of supply in May 2025, up from 8.5 one year ago.
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