October 27, 2026 | J.L. Miller Realty | Greater Birmingham Real Estate Market*
Mortgage rates finally gave homebuyers a little breathing room last week. But while everyone was watching interest rates, something else was happening across the Birmingham housing market. The number of homes available for sale was shrinking. And depending on where you’re looking to buy or sell, that could be a much bigger deal than a slight drop in mortgage rates.
I reviewed 13 Birmingham-area housing market reports dated October 25, and one thing became clear: 11 of those 13 markets had fewer homes available than the previous week. That’s quite a turnaround considering inventory increased in 10 of those markets just one week earlier.
So, are buyers running out of options? Are sellers gaining the upper hand? And is the housing market finally shifting?
Well, as usual with real estate, the answer depends on where you look.
Let’s break it down.
Birmingham’s Housing Inventory Is Shrinking. Here’s Why That Matters.
Imagine walking into your favorite grocery store and discovering that half the shelves are empty. The remaining products suddenly become a little more valuable, don’t they?
That’s essentially what’s happening in portions of Birmingham’s housing market.
Here’s how active listings changed over the past week:
- Shelby County: 32 fewer homes for sale
- City of Birmingham: 23 fewer homes
- Pelham: 21 fewer homes
- Homewood: 8 fewer homes
Meanwhile, Jefferson County added 18 active listings, and Gardendale added two. Now, before anyone starts shouting about another housing shortage, there’s something worth remembering.
It’s fall.
Historically, some homeowners choose to take their properties off the market during the colder months, preferring to wait until spring. That seasonal pattern may be contributing to what we’re seeing. But here’s what matters: Fewer homes for sale doesn’t automatically mean more people are buying them.
And that’s where the numbers get interesting.
Are Homes Selling Faster, or Are There Just Fewer Homes to Choose From?
There’s a statistic in real estate called the pending ratio. Don’t worry. I’m not about to turn this into a math class. The pending ratio simply compares how many homes are under contract to how many are actively listed for sale.
Think of it as a quick way to measure buyer activity relative to available inventory. A higher percentage can signal a more competitive market. But there’s a catch. If the number of homes for sale drops, that percentage can increase even when buyers aren’t making more offers.
This week, pending ratios increased in seven of the 13 markets I tracked. Five declined, and one remained unchanged. Actual contract counts told a more complicated story.
Shelby County had 26 fewer pending homes, and Jefferson County had 11 fewer. Meanwhile, Trussville gained six pending contracts, and St. Clair County gained eight. Translation? Some markets are attracting more buyer activity. Others simply have fewer homes available. Those are two very different situations, especially if you’re trying to decide whether it’s a good time to make an offer or put your house on the market.
Vestavia Hills vs. Chilton County: Two Completely Different Housing Markets
If you want proof that there isn’t one single Birmingham-area housing market, take a look at these numbers.
| Market Indicator | Vestavia Hills | Chilton County |
| Months of inventory | 2.3 months | 5.5 months |
| Homes under contract relative to active listings | 43.9% | 18.3% |
| Average sale price vs. original list price | 100.3% | 91.6% |
| Average days to sell | 19 days | 67 days |
Source: October 25 TMO market reports. Sale-to-original-list percentages calculated from reported averages.
Let’s put those numbers into perspective. In Vestavia Hills, homes are selling in an average of just 19 days, and recent sales averaged slightly above their original asking prices. Meanwhile, in Chilton County, homes took an average of 67 days to sell, and sale prices averaged about 8.4% below their original asking prices. That’s a remarkable difference.Both areas are operating in the same regional economic environment, with buyers facing the same national mortgage-rate trends. Yet the experience of buying or selling in either location can be dramatically different.
Why? Because real estate is local. And sometimes, local means the difference between two neighborhoods just a few miles apart. Six months of housing inventory is commonly used as a benchmark for a balanced market. Among the 13 markets I reviewed, Chilton County was the closest to that level. Vestavia Hills, with only 2.3 months of inventory, tells a very different story. This is exactly why I caution buyers and sellers against making major decisions based solely on national real estate headlines.
The national market doesn’t determine what your house is worth. Your local competition does.
Keep an Eye on Trussville. Something Interesting Is Happening.
One of the more interesting trends in this week’s report comes from Trussville. Over the past three weeks, its pending ratio has steadily increased:
- Week 1: 21.8%
- Week 2: 24.7%
- Week 3: 28.4%
Meanwhile, months of inventory declined from 4.6 to 3.5. That’s a meaningful shift over a relatively short period.
Moody also reported a strong pending ratio of 42.3%.Does that mean buyers should rush to purchase a house in Trussville before prices skyrocket?
Absolutely not. Three weeks of data aren’t enough to declare a lasting trend, especially in smaller markets where a handful of transactions can noticeably change the percentages. But it does suggest buyer activity is worth watching. And for anyone considering buying or selling in Trussville, it’s a reminder that market conditions can change long before national headlines catch up.
Mortgage Rates Dropped to 7.32%. How Much Does That Actually Save You?
Now let’s talk about the number that grabbed everyone’s attention. According to Freddie Mac, the average 30-year fixed mortgage rate fell from 7.40% to 7.32% on October 22, 2026. A decrease is certainly welcome news.
But before we start celebrating, let’s see what it means for your wallet. Imagine you’re purchasing a home with a $320,000 mortgage. Here’s approximately what your monthly principal and interest payment would look like:
| Mortgage rate | Monthly payment |
| 7.40% | $2,215 |
| 7.32% | $2,198 |
| 6.19% (one year ago) | $1,958 |
*Estimates assume a $320,000 loan with a 30-year fixed term. Payments exclude property taxes, homeowners insurance, mortgage insurance, and other costs.*
That recent rate drop saves approximately $17 per month. Not exactly the kind of savings that makes you call your boss and announce your retirement. Still, every dollar matters when you’re buying a home. The bigger opportunity may come from how you structure your purchase.
For example, negotiating a seller-paid mortgage rate buydown or closing-cost credit could potentially save you more than this week’s rate movement. That’s why I encourage buyers to focus less on trying to predict the perfect interest rate and more on understanding their financing options.
A good real estate decision isn’t always about getting the lowest rate. It’s about finding the right home at a price and payment that work for you.
Buying a Home in Birmingham? Here’s How I’d Approach This Market.
If you’re planning to purchase a home in the coming months, this week’s numbers offer a few practical lessons. First, get your financing organized before you find the house. With inventory declining across much of the area, the right property may not stay available for long. Having your mortgage preapproval ready gives you a better chance to act when you find something you love.
Second, compare financing options instead of obsessing over one interest rate. Ask your lender to calculate your monthly payment at the current rate, at a rate half a percentage point lower, and with a seller-paid buydown. Seeing those options side by side can help you make a more informed decision.
Third, don’t overlook homes that have been sitting on the market. Here’s a statistic that caught my attention. In Jefferson County, active listings averaged 89 days on the market, compared with 41 days for homes that sold. That doesn’t mean every home sitting for 60 or 90 days is overpriced. But it does mean those properties deserve a closer look. Find out why they haven’t sold. Review comparable sales. Ask whether the seller has made price adjustments or might consider concessions. Sometimes the best opportunity isn’t the newest listing. It’s the one everyone else stopped looking at.
Selling a Home in Birmingham? Less Competition Doesn’t Guarantee a Higher Price.
If you’re thinking about selling, fewer active listings could work in your favor. After all, fewer competing homes can mean more attention for yours. But there’s an important distinction between having less competition and being able to charge whatever you want.
Across many of the markets I reviewed, recent sale prices averaged approximately 2% to 4% below original asking prices. Buyers are still comparing homes, evaluating condition, and negotiating. And in a market where affordability is already a challenge, pricing mistakes can become expensive.
Here’s what I’d focus on if I were preparing to sell right now.
- Price your home based on what buyers are actually paying.Not what your neighbor hopes to get. Not what an online estimate suggested six months ago. Look at recent comparable sales and current competition.
- Make a strong first impression. Presentation, photography, condition, and marketing all matter. You want your home to stand out when buyers are actively searching, not after weeks of price reductions.
- Understand your specific neighborhood and price range. A $300,000 home in Pelham may face entirely different competition than a $700,000 home in Vestavia Hills. Even within the same city, different price points can behave like completely separate markets. Your selling strategy should reflect that reality.
The Bottom Line: Don’t Let the Headlines Make Your Real Estate Decisions. Mortgage rates dropped this week, and that’s encouraging. But the bigger story unfolding across Birmingham may be the changing supply of available homes. Eleven of the 13 markets I track reported fewer active listings. Some areas, like Vestavia Hills, continue to show relatively tight inventory and strong pricing. Others, like Chilton County, offer buyers more time and negotiating room. And places like Trussville are showing changes in buyer activity worth watching.
Here’s what I want you to remember:
There is no single Birmingham housing market. There are dozens of smaller markets, each with its own opportunities and challenges. The key isn’t trying to time the entire market perfectly. It’s understanding the numbers that matter for your situation.
Wondering What These Numbers Mean for Your Home?
Whether you’re thinking about buying, selling, or simply curious about what’s happening in your neighborhood, I’d be happy to help you make sense of the market. I’ll put together a personalized market snapshot showing recent sales, current competition, and opportunities specific to your area.
And if you’re buying, we can look at different mortgage scenarios to better understand your potential monthly payment. No pressure. No sales pitch. Just useful information to help you make your next move with confidence.
Reach out to J.L. Miller Realty at info@jlmillerrealty.com
Jebari Miller | Associate Broker, REALTOR® | J.L. Miller Realty
Sources and methodology
- Local housing data:TMO market reports dated October 25, 2026, covering 13 Birmingham-area markets. Weekly changes are compared with the preceding reports. Local figures were supplied in the original market analysis.
- Mortgage rates: Freddie Mac Primary Mortgage Market Survey, October 22, 2026. National averages are not individual lending offers.
- Payment calculations: Based on a 30-year fully amortizing mortgage. Actual rates and payments depend on borrower qualifications, loan terms, and lender requirements.
- Market comparisons: Original-list-price percentages are calculated from reported market averages and should not be interpreted as the average of individual transaction ratios.
