Home prices have surged in the U.S. in recent years. Driven by rising demand and supply constraints during the pandemic, the median home sale price spiked by nearly 50% from the second quarter of 2020 to Q3 in 2022. While the sale price of a typical American home has fallen in recent months since, housing prices remain at historic highs.

Not only have home values soared, but borrowing costs for home buyers have also climbed. The average interest rate on a 30-year fixed mortgage has been above 6% since September 2022, a high not seen in nearly a decade and a half. In a market defined by high prices and high mortgage rates, homeownership has become prohibitively expensive for a large number of Americans.

Still, housing prices are also subject to a number of factors that can be isolated from broader, nationwide market trends — and location is one of them. Two homes that are virtually identical can vary in price by hundreds of thousands of dollars, depending on where they are. And for prospective homeowners on a budget, some Alabama cities are far more affordable than others.

According to five-year estimates from the U.S. Census Bureau’s 2022 American Community Survey, the typical home in Alabama is worth $179,400. But across the 24 cities, towns and unincorporated communities in the state with populations of at least 25,000, median home values range from less than $100,000 to nearly $470,000.

In any local market, home prices are often a reflection of what residents can afford. In Alabama, many of the least expensive cities for homebuyers are not high-income areas. Of the 24 Alabama cities with available data from the ACS, nine have a median home value that is less than the statewide median. In each of these places, the typical household earns less than the statewide median household income of $59,609. Similarly, most of Alabama’s more expensive housing markets have higher earning populations.

Why It Matters

Homeownership is one of the most practical ways to build wealth in the United States, and rising borrowing costs and home values are pricing out a growing share of the population. The state of the U.S. housing market also has broader economic implications. According to the Congressional Research Service, spending associated with homeownership totaled $1.1 trillion in 2021, or nearly 5% of U.S. gross domestic product.

These are the cheapest and most expensive housing markets in Alabama.

24. Gadsden

• Median home value: $96,900
• Homes worth over $1 million: 0.1%
• Homeownership rate: 55.5%
• Median household income: $39,696
• Total population: 33,881

23. Bessemer

• Median home value: $118,600
• Homes worth over $1 million: 0.4%
• Homeownership rate: 54.3%
• Median household income: $34,953
• Total population: 25,890

22. Birmingham

• Median home value: $123,000
• Homes worth over $1 million: 1.6%
• Homeownership rate: 45.9%
• Median household income: $42,464
• Total population: 200,431

21. Montgomery

• Median home value: $141,900
• Homes worth over $1 million: 0.8%
• Homeownership rate: 53.5%
• Median household income: $54,166
• Total population: 199,819

20. Phenix City

• Median home value: $154,000
• Homes worth over $1 million: 1.3%
• Homeownership rate: 51.8%
• Median household income: $46,944
• Total population: 38,413

19. Mobile

• Median home value: $158,400
• Homes worth over $1 million: 1.3%
• Homeownership rate: 50.6%
• Median household income: $48,524
• Total population: 186,316

18. Florence

• Median home value: $168,800
• Homes worth over $1 million: 0.4%
• Homeownership rate: 49.9%
• Median household income: $47,048
• Total population: 40,781

17. Decatur

• Median home value: $170,000
• Homes worth over $1 million: 0.4%
• Homeownership rate: 63.8%
• Median household income: $55,164
• Total population: 57,525

16. Dothan

• Median home value: $175,900
• Homes worth over $1 million: 0.9%
• Homeownership rate: 58.7%
• Median household income: $53,704
• Total population: 70,699

15. Enterprise

• Median home value: $190,700
• Homes worth over $1 million: 0.3%
• Homeownership rate: 57.9%
• Median household income: $64,888
• Total population: 28,513

14. Opelika

• Median home value: $191,800
• Homes worth over $1 million: 0.0%
• Homeownership rate: 69.5%
• Median household income: $55,218
• Total population: 31,361

13. Prattville

• Median home value: $196,300
• Homes worth over $1 million: 0.2%
• Homeownership rate: 66.6%
• Median household income: $76,176
• Total population: 38,124

12. Athens

• Median home value: $224,200
• Homes worth over $1 million: 0.3%
• Homeownership rate: 63.2%
• Median household income: $57,444
• Total population: 26,179

11. Alabaster

• Median home value: $227,300
• Homes worth over $1 million: 0.3%
• Homeownership rate: 85.3%
• Median household income: $89,423
• Total population: 33,417

10. Tuscaloosa

• Median home value: $228,300
• Homes worth over $1 million: 1.5%
• Homeownership rate: 45.7%
• Median household income: $47,257
• Total population: 105,797

9. Huntsville

• Median home value: $236,300
• Homes worth over $1 million: 2.1%
• Homeownership rate: 57.5%
• Median household income: $67,874
• Total population: 215,025

8. Northport

• Median home value: $239,800
• Homes worth over $1 million: 0.4%
• Homeownership rate: 62.0%
• Median household income: $72,286
• Total population: 30,714

7. Daphne

• Median home value: $276,300
• Homes worth over $1 million: 6.1%
• Homeownership rate: 71.5%
• Median household income: $80,657
• Total population: 27,861

6. Auburn

• Median home value: $327,000
• Homes worth over $1 million: 1.9%
• Homeownership rate: 51.3%
• Median household income: $55,509
• Total population: 76,660

5. Madison

• Median home value: $327,100
• Homes worth over $1 million: 0.7%
• Homeownership rate: 74.8%
• Median household income: $118,132
• Total population: 56,967

4. Trussville

• Median home value: $333,200
• Homes worth over $1 million: 0.6%
• Homeownership rate: 92.9%
• Median household income: $118,028
• Total population: 25,621

3. Hoover

• Median home value: $366,200
• Homes worth over $1 million: 2.2%
• Homeownership rate: 69.5%
• Median household income: $101,765
• Total population: 91,995

2. Homewood

• Median home value: $463,500
• Homes worth over $1 million: 6.4%
• Homeownership rate: 63.6%
• Median household income: $97,366
• Total population: 27,557

1. Vestavia Hills

• Median home value: $467,600
• Homes worth over $1 million: 6.6%
• Homeownership rate: 76.7%
• Median household income: $127,582
• Total population: 38,600

Rank	Places in Alabama with at least 25,000 residents	Median home value ($)	Homeownership rate (%)	Median household income ($)	Total Population
1	Vestavia Hills	467,600	76.7	127,582	38,600
2	Homewood	463,500	63.6	97,366	27,557
3	Hoover	366,200	69.5	101,765	91,995
4	Trussville	333,200	92.9	118,028	25,621
5	Madison	327,100	74.8	118,132	56,967
6	Auburn	327,000	51.3	55,509	76,660
7	Daphne	276,300	71.5	80,657	27,861
8	Northport	239,800	62.0	72,286	30,714
9	Huntsville	236,300	57.5	67,874	215,025
10	Tuscaloosa	228,300	45.7	47,257	105,797
11	Alabaster	227,300	85.3	89,423	33,417
12	Athens	224,200	63.2	57,444	26,179
13	Prattville	196,300	66.6	76,176	38,124
14	Opelika	191,800	69.5	55,218	31,361
15	Enterprise	190,700	57.9	64,888	28,513
16	Dothan	175,900	58.7	53,704	70,699
17	Decatur	170,000	63.8	55,164	57,525
18	Florence	168,800	49.9	47,048	40,781
19	Mobile	158,400	50.6	48,524	186,316
20	Phenix City	154,000	51.8	46,944	38,413
21	Montgomery	141,900	53.5	54,166	199,819
22	Birmingham	123,000	45.9	42,464	200,431
23	Bessemer	118,600	54.3	34,953	25,890
24	Gadsden	96,900	55.5	39,696	33,881

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