Huntsville’s rapid growth continued throughout 2025, according to the latest Huntsville Development Review.

Last year’s record home sales in Huntsville built upon 2024 momentum and kept the Rocket City at the top of the list of Alabama’s fastest growing cities. The review reported nearly 5,000 new housing units on the market throughout 2025.

Single-family home construction is on the rise again after apartment builds led 2024. Last year, the Huntsville Planning Commission approved the highest number of single-family lots since 2007: 1,892. The review predicts an increase in construction of single-family homes as a result, which could span the next two to three years.

Madison County real estate by the numbers

Madison County kicked off 2026 with fewer new single family home listings on the market and an increase in pending sales. The Jan. 24 weekly report from the Huntsville Area Association of Realtors (HAAR) notes that new listings in Madison County decreased by 12%. Pending sales increased by 23.9%.

In Dec. 2025, median sales prices in Madison County decreased by 1.0% to $324,950, well below the National Association of Realtors (NAR) nationwide median. The number of days listings spent on the market decreased by 3.3%.

Homes spent an average of 58 days on the market. The three-month average for new listings from Nov. 1, 2025 to Jan. 24, 2026 showed a 2.8% increase year over year.

National real estate market experiences slower growth

Overall, 2025 was a slower year for real estate nationwide. Homeowners remained reluctant to sell in 2025 amid economic uncertainty, though sales picked up in Dec.

NAR reports that sales of existing single-family homes rose by 5.1% month over month in Dec. 2025. This amounted to a 1.4% increase in existing home sales year over year since Dec. 2024.

Pending home sales across the U.S. dropped by 9.3% across all four regions, according to NAR. As of last Dec., median home prices across the U.S. increased by 0.2%, coming in at $409,500.

NAR’s report says sales increased across all four national regions month over month. In the South, year over year sales rose. At the same time, sales dropped in the Northeast and remained stagnant in the West and Midwest.

A drop in 30-year fixed mortgage rates

HAAR’s report notes that, as of Jan. 15, the average 30-year fixed mortgage rate fell to 6.06%. According to Freddie Mac, this is the lowest rate since Sept. 2022.

With interest rates dropping, borrowers are responding. NAR predicts a 14% increase in existing single-family home sales for 2026.

The Mortgage Bankers Association also reported that lower mortgage rates coincided with an increase in purchase and refinance applications in Jan.

New construction more affordable than existing home sales

With the cost of new construction currently more affordable than existing home sales, the National Association of Home Builders (NAHB) forecasts a 1% increase in new builds this year.

According to NAHB’s chief economist Robert Dietz, lower costs and better builder incentives will pave the way for more home buyers to act. He says approximately 40% of builders lowered their prices in Dec. 2025 by an average of 5%.

Outside of price reductions, roughly two-thirds of home builders are offering alternative incentives, including help with closing costs, feature upgrades, and mortgage rate buydowns. That means major cost savings and lower monthly payments for buyers’ first few years in their new home.

Dietz says the ongoing housing deficit is a major factor driving existing home prices. As long as housing inventory remains low, new builds could continue to be more affordable than existing homes.

The only solution to the deficit, Dietz says, is to “build our way out” of it.