Every year, many aspects of the real estate market here in Central Alabama change depending on the general economy and how well the state’s real estate market is doing. One of the most-watched real estate market trends of 2024 is changes to the interest rates you will have to pay when you borrow a loan.
Keep reading for a full breakdown of the projected 2024 interest rates in the Birmingham-Hoover Metro Area and what these mean for residential buyers, commercial buyers, and investors.
Projected Interest Rate Trends in Alabama
Alabama has had a strong real estate market that has been steadily growing over the past few years. This is mainly accredited to the diverse range of properties that cater to different preferences buyers may have. Alabama has also had relatively low mortgage interest rates, making this state a very attractive place for buyers.
Analysts generally believe that there are rate cuts are on the horizon in 2024 that could also potentially reach into 2025 and 2026. The 2024 interest rate projections indicate that there may be three rate cuts throughout 2024. Of course, different economic shifts could always impact this trajectory.
Interest Rate Outlook for the Birmingham-Metro Area
It is very likely that we will see interest rates drop more towards the middle of the year as we approach the third rate cut. Nationally, interest rates have risen above 7% as of late, but for those looking to buy or invest in Birmingham, Alabama, the interest rates will most likely range between the higher side of 5% and mid to high 6%.
Keep in mind that interest rates are very dependent on each person’s personal situation and the real estate property. While the market certainly has an impact on what you’ll ultimately pay, it isn’t everything—which makes having a true real estate expert on your side all the more important.
Projected Rental Rates in Alabama
As is the case in most states across the U.S., most people anticipate rent hikes in Alabama this year. There are many factors that have led to this steady rise, including the reduced availability of housing.
Many anticipate that there will be a national 5.6% rise in rent across 2024. As for Birmingham, Alabama, the prediction is very much the same at around a 5% increase for renters.
Because rental prices impact those looking to purchase homes, as they impact their ability to save for a down payment, investors and landlords are likely to see an increase in applicants despite rising costs.
Some of the most attractive investment neighborhoods that are most likely to see growth in renter-occupied houses include:
- Highland Park & Five Points South
- Crestwood South
- Forest Park
- South Eastlake
- Crestline
- Central City/Downtown/UAB
- Southside
Bonus Real Estate Market Projections For 2024
Aside from 2024 rental rates, there are many other real estate market trends that will impact the market this year. Here are some additional projections to be on the lookout for, whether you are a buyer or investor.
New Construction
Alabama has kept pace pretty well when it comes to new construction, particularly of multi-family housing developments, and it looks like 2024 will be no different. Birmingham’s multi-family market is booming, both in terms of supply and demand, with a net positive absorption rate for four quarters in a row. That said, new construction predictions are expected to stretch across both commercial and residential real estate properties in 2024.
Home Prices
While some of the post-pandemic housing craze has cooled, home values in Alabama are still way up, making it a strong housing market. Home sales and prices were still rising in January 2024 and are expected to continue to go up until the dynamic of low supply and high demand changes. In fact, it is predicted that there will be a 5% appreciation in prices for Birmingham homes in 2024.
This is another real estate market trend that may overlap with other trends as new construction can help to meet the demand, eventually resulting in home prices leveling out again.
Home Sales
A positive prediction for the Birmingham, Alabama, real estate market is that home sales should continue to increase. This is closely related to the mortgage demand that arose around November and December of 2023. With rent rates going up, renters are also more motivated to buy property as a more substantial and long-lasting investment.
Get Help Navigating Birmingham’s Dynamic Real Estate Market
The real estate market is never dull, but it takes years of expertise, insight, and analysis to truly harness its true potential. Whether you’re investing in the next great addition to your real estate portfolio or in your family’s future, Red Rock Realty is here to help. We’re the Birmingham metro area’s trusted real estate investment group, helping bring our residential and commercial partners to success on a rock-solid foundation.
For personalized insights into 2024’s market trends, reach out to the experts at Red Rock Realty today!
Contact Red Rock Realty in Birmingham, AL, For More Real Estate Market Trend Projections
Navigating real estate market trends can feel overwhelming, which is why you need a dependable real estate brokerage company. At Red Rock Realty, we are the leader in the Birmingham, AL, market, and we provide rock-solid assurance of real estate excellence for residential buyers, commercial buyers, and investors. Contact us today by calling 205-324-3383 for our real estate services in Birmingham and the surrounding areas in Alabama.