Birmingham Housing Market Update | November 3, 2026
Good news: Mortgage rates fell for the second week in a row. Bad news: Someone forgot to tell the housing market it was supposed to celebrate.
Freddie Mac reported that the average 30-year fixed mortgage rate dropped to 7.24% on October 29, down from 7.40% just two weeks earlier. For buyers who’ve spent much of the year watching mortgage rates, that’s a welcome change.
But across the Birmingham metro, buyers weren’t exactly lining up at the closing table.
According to the November 1 local housing market reports, the number of homes under contract declined in 10 of the 13 local markets. Even as borrowing costs eased, fewer properties were pending sale. The timing suggests the typical fall slowdown may be outweighing modest improvements in affordability. For anyone planning to buy or sell a home before the end of the year, that difference matters.
Lower Mortgage Rates Haven’t Brought Buyers Rushing Back
On paper, falling mortgage rates should encourage buyers. Lower interest rates reduce monthly payments, giving buyers a little more room in their budgets. But real estate rarely follows the script. Hoover recorded 57 fewer pending contracts than the previous week. Jefferson County had 46 fewer, while the city of Birmingham lost 45.
These are changes in the number of homes currently under contract, not a count of newly signed contracts during the week. Still, they tell us buyer activity isn’t gaining momentum. Meanwhile, the number of active listings declined in nine of the 13 markets.
That’s the interesting part. We’re seeing fewer homes available for sale, but also fewer homes under contract. Ordinarily, declining inventory might create more competition among buyers. Instead, the latest figures suggest buyers are becoming more selective or simply taking a break. Seasonality likely plays a role. November typically brings slower real estate activity as the holidays approach. The takeaway? A lower mortgage rate can make buying more affordable. It can’t make someone want to move.
What Falling Rates Actually Mean for Your Mortgage Payment
Let’s put the rate movement into perspective. On a $320,000 mortgage with a 30-year term, the estimated monthly principal and interest payment at 7.24% is approximately $2,181. Two weeks earlier, at 7.40%, that payment would have been approximately $2,216. That’s about $35 in monthly savings. Helpful? Certainly. Enough to convince someone who wasn’t ready to purchase a house two weeks ago to suddenly start shopping? Probably not.
And affordability remains a challenge. Compared with the 6.17% average reported a year earlier, that same mortgage still costs approximately $227 more per month in principal and interest. Those estimates exclude taxes, insurance, and other housing expenses. This is why I encourage buyers to think beyond the interest-rate headlines. A negotiated purchase price, seller-paid closing costs, or a mortgage rate buy down may have a greater impact on your finances than waiting for another small rate decrease. The monthly payment matters more than the headline.
One City. Two Completely Different Housing Markets.
Here’s where Birmingham’s real estate numbers become particularly interesting. Imagine you’re shopping for a home in the city of Birmingham. In one price range, available homes are relatively scarce compared with the pace of sales. In another, buyers have considerably more inventory to consider. And we’re not comparing Birmingham with Hoover, Homewood, or Vestavia Hills. We’re comparing two price ranges within Birmingham city limits.
Homes priced between $500,000 and $599,999 currently have approximately 2.6 months of inventory. Meanwhile, homes priced between $200,000 and $224,999 have 7.7 months of inventory. Months of inventory estimates how long the available supply would last at the current sales pace if no additional homes entered the market. In the higher price range, the relatively limited supply can make competition more meaningful. In the lower price range, the larger supply relative to sales gives buyers more options and potentially more room to negotiate.
That doesn’t mean every $550,000 house will sell quickly or every $215,000 listing is negotiable. Property condition, pricing, location, and individual circumstances still matter. But it highlights a problem with relying on broad market headlines.
The Birmingham housing market isn’t operating at one speed.
You could be selling a house in a relatively competitive price range while another seller, just across town, is facing a much slower market. Same city. Same mortgage rates. Entirely different experience.
Where the Market Is Showing Signs of Weakness
Gardendale delivered one of the most notable changes this week. Its housing inventory increased from 4.3 to 6.3 months of supply, moving it into the slowest position among the 13 tracked markets. Pelham is also showing signs of softer activity, with 5.6 months of inventory. Meanwhile, Vestavia Hills, Moody, and Hoover remain among the tighter markets, although pending activity weakened in all three.
There’s an important caveat: smaller markets can shift dramatically when just a few properties enter or leave the pending category. One weekly report doesn’t establish a long-term trend. But the direction is worth watching, especially for homeowners deciding whether to list now or wait until spring.
What This Means if You’re Buying or Selling
If you’re buying: This may be an opportunity to shop with less pressure in certain markets. Get preapproved, compare financing options, and pay attention to properties that have been listed for several weeks. In Jefferson County, active listings have been on the market for an average of 89 days, while homes that sold took an average of 41 days. That gap is worth investigating before making an offer.
If you’re selling: Don’t confuse fewer competing listings with guaranteed buyer demand. Most of the markets I reviewed recorded average sale prices approximately 2% to 4% below original asking prices. Pricing and presentation still matter, particularly when buyers have more time to compare options.
For both sides, the most useful number isn’t necessarily the county average. It’s what’s happening among properties competing in your specific location and price range.
What I’m Watching Next
Last week, I expected some softness in buyer activity, but the decline in pending contracts was broader than I anticipated. That’s worth acknowledging. Over the next few weeks, I’ll be watching whether mortgage rates continue to decline, whether pending activity stabilizes, and whether markets such as Gardendale and Pelham continue to accumulate inventory.
Freddie Mac’s next mortgage-rate update arrives November 5. Another decrease would be encouraging, but it wouldn’t guarantee an immediate increase in home buying activity.
The bottom line: Birmingham buyers are getting a little relief on mortgage rates, but they aren’t rushing back into the market. For now, patience may be an advantage as long as it’s backed by good information.
Curious how your neighborhood or price range compares? Send me your area and price range, or your property’s address, and I’ll share a personalized market snapshot.
Jebari Miller | Associate Broker, REALTOR® | J.L. Miller Realty
Sources and methodology: TMO Reports, single-family residential, November 1, 2026, compared with October 25, 2026; Freddie Mac Primary Mortgage Market Survey, October 29, 2026.
Pending ratio represents homes currently under contract divided by active listings. Inventory figures are reported by TMO. The TMO closed-sale statistics use a rolling six-month reporting period from May 1 through November 1, 2026. Average values are not medians. Mortgage payment illustrations assume a fixed-rate, 30-year mortgage and exclude taxes, insurance, and other costs.
