Across the country, pending sales have stalled, as interest rates have not only failed to decrease in accordance to the schedule established by the Federal Reserve’s planned scale back of its anti-inflation measures, but have actually ticked back up slightly, reaching 7% at the end of February.

According to Redfin’s national survey, this has caused an 8% decline on average in pending sales across the United States.

However, reports from the Huntsville Area Association of Realtors (HAAR) indicates that our local market may prove an exception to that trend. Its latest report, measuring the week of February 17, show an increase of pending sales of both single-family and townhouse units, of 14.7% and a straight 50%, respectively.

New listings increased by 42.4% for single-family units, and 225% for townhouse units. Meanwhile, the introduction of new inventory continued apace, with a 12.5% increase for single-family units and a 36.4% addition of townhouses.

These figures are building off of the statistics reported by HAAR’s 2023 Annual and Quarter 4 Report, where the total inventory of homes available for sale in the Huntsville/Madison County area increased 21% by the end of December 2023.

While the total number of sales for Q4 2023 lagged behind the same period year-over-year, with a 3% decrease compared to Q4 2022, it still marked a decided improvement over the downright anemic sales of the previous quarters of 2023.

Of particular note is the fact that only 4% of housing sales in our area over 2023 were in the $150K or less range. Housing prices, both locally and across the country, are projected to only continue to rise over the course of 2024, which could see this already-small range of more affordable housing deplete even further.

That the local economy remains as robust as it does explains how and why the Huntsville/Madison County market is bucking the national trend of fewer sales in the face of persistently-high interest rates. The Median Household Income for Madison County is $80,123. This is 34% higher than the state average for Alabama, and 10% higher than the national average.

The strong economy here in Northern Alabama means that more people will continue to come here to work and live. This keeps the bottom from falling out under the market, with a continual stoking of demand for housing, but it also means that the amelioration of high prices due to the introduction of more inventory is likely to be more moderate.

With the Federal Reserve looking to see a six-month period of disinflationary markets, it seems unlikely that it will make any cuts to interest rates during the spring, as previously suggested. Experts are now looking at June as the more likely timeframe to begin seeing overt action on the part of the Federal Reserve to begin making cuts.

As always, the Huntsville Business Journal will continue to monitor the real estate market, both here and on the national scale, and report developments as they occur.