Greater Birmingham Housing Market Report — October 2026

Last updated: October 2026 · By Byron Bennett, The Williams Group at Keller Williams Realty

October 2026 Edition  |  Reporting August 2026 Closings  |  The Williams Group at Keller Williams Realty

What Is Happening With Mortgage Rates?

Rates went up in September. On September 16, the Federal Reserve raised its key rate by a quarter point, to a range of 3.75% to 4%. It was the Fed’s first rate hike since 2023. The Fed said inflation is still too high.

Mortgage rates followed. Freddie Mac’s weekly survey showed the 30-year fixed rate at 7.03% on September 24. That was up from 6.76% two weeks earlier and 6.30% one year ago. Fannie Mae’s September forecast expects rates near 6.8% through the end of 2026 and about 6.7% in 2027. So the cheaper loan many buyers were waiting for is not on the way soon. That makes the price you pay, and the help you can get from a seller, matter more.

In August, a young family called our Birmingham team. They had been renting and were ready to buy their first home. Then they watched rates climb toward 7%. Their plan was to wait until spring and hope rates came down. They also figured the best homes would draw bidding wars, so they would have to offer over asking anyway.

Melody Martin started by listening. Melody was born and raised in Birmingham. Before real estate, she spent more than ten years as a cosmetologist, where her whole job was learning what each client really wanted. She asked the family what mattered most: room for their kids, a yard and a payment they could live with. Then she pulled August’s sales by county. In Jefferson County, homes were selling at about 99.7% of asking in about 15 days. In Shelby County, homes sold at about 98.7% of asking, so buyers still had a little room to negotiate. And the forecasts no longer showed rates falling soon. Waiting for spring was not likely to save them money.

So Melody widened the search into Shelby County, where the family’s budget went further, and showed them homes in Pelham and Helena. They found a home that checked every box on their list. They offered close to the asking price, kept their inspection, and asked the seller to help with closing costs. The seller said yes, and that help lowered their monthly payment. They locked their rate before the late-September jump. Our first-time home buyer guide walks through each step. The lesson is simple. Start with what you need, then let the numbers show you where to find it.

Work with the agent from this story

Melody Martin was born and raised in Birmingham and is one of the newest members of our Greater Birmingham team. She spent more than a decade as a cosmetologist before real estate, and she brings that same focus on listening to every client she serves. Start with a simple conversation.

Melody Martin, REALTOR®, The Williams Group  |  Call or text: 205-936-5594

Visit Melody’s Site →

How Did August Go in Jefferson and Shelby Counties?

Here are the numbers, straight from the Greater Alabama MLS. The table compares August 2026 to August 2025 for both counties.

Source: Greater Alabama MLS Market Statistics, residential class, pulled October 1, 2026. Closed-month data can shift slightly as late entries post.

Last month we asked whether Jefferson County’s July price dip was a blip or a trend. August answered it. The median held at $310,000, the same as July. Because last August was lower, that is now a gain of about 3.8% from a year ago. Homes still sold very close to full price, but the over-asking bidding of early summer is gone. In June, Jefferson homes sold for 100.66% of asking. In August, it was 99.72%.

Shelby County kept climbing. The median rose from $372,000 in July to $380,232 in August, about 4.2% above last year. Sales were nearly flat. Buyers there still negotiated about 1.3% off the typical asking price. As of October 1, there were about 3,289 homes for sale in Jefferson County and 1,332 in Shelby County. That is a current count only, so we do not compare it to last year. Remember, the county trend is a starting point, not advice. Hoover, Vestavia Hills, Helena and Pelham each behave differently.

What Does This Mean for Sellers?

Your equity likely grew. The typical home in both counties sold for about 4% more than last August. In Jefferson County, homes are selling at nearly full price in about two weeks. That means the price you list at is likely close to the price you get, so set it carefully. In Shelby County, buyers usually negotiate a little, so build that into your plan. With rates above 7%, more buyers will ask for help with closing costs or a rate buydown. Knowing that ahead of time helps you compare offers. Our selling resources cover what preparation actually pays off. If you are 55 or older and still deciding whether to move at all, the free Next Chapter Housing Assessment is a no-pressure, 10-minute way to think it through.

What Does This Mean for Buyers?

You do not need to overpay, and you do not need to give up your protections. Full price with a clean, well-explained offer wins in Jefferson County. In Shelby County, there is usually some room to negotiate. On rates, the honest truth is that they went up, not down. Ask about seller help with closing costs, and ask whether a home has an assumable loan. If you are a veteran or service member, our VA home buyer guide explains how VA loans work here. First-time buyers can start with our first-time home buyer guide, and our financing resources help you run your own numbers.

What Are We Watching Next Month?

We are watching two things. First, how buyers react to 7% rates. August’s closings were mostly locked in before the September jump, so September’s numbers will be the first real test. Second, the sale-to-list ratio in Jefferson County. It slipped from over 100% in June to 99.72% in August. If it keeps sliding, buyers there will gain a little more room to negotiate. We are not in the prediction business. We are in the reporting business. You can read last month’s report or browse all of our housing market reports anytime.

Greater Birmingham Housing Market FAQ

Moving to the metro from out of state? Our relocation guides do the math this report does not: Moving to Hoover, Moving to Homewood, Moving to Vestavia Hills and Moving to Birmingham, plus our statewide guide to relocating to Alabama.

The Williams Group at Keller Williams Realty reports on the Greater Birmingham housing market every month. The client story in this report is shared to show how the numbers play out in real decisions.

Sources: Greater Alabama MLS Market Statistics, residential class, Jefferson and Shelby counties, August 2026 and August 2025, pulled October 1, 2026. Freddie Mac Primary Mortgage Market Survey, September 24, 2026. Federal Reserve implementation note, September 16, 2026. Fannie Mae September 2026 housing forecast.