2026 Southeast Housing Outlook: AL, TN & GA Trends

The Southeast housing market is set for intriguing developments in 2026, with Alabama, Tennessee, and Georgia poised to demonstrate unique regional trends. While national forecasts suggest modest home price growth and improving inventory, local dynamics offer a more nuanced picture. This article delves into the regional home price trends, inventory and buyer demand dynamics, interest rate impacts on affordability, and strategic opportunities for buyers and sellers in 2026.

Regional Home Price Trends in 2026

In 2026, the Southeast housing market is expected to show modest but positive growth in home prices. Nationally, Zillow forecasts a rise in U.S. home values by 1.2%, reflecting a trend towards stability. Realtor.com predicts a 2.2% increase in existing-home prices and a 1.7% rise in sales, with inventory projected to grow by nearly 8.9%.

In Alabama, home price growth varies significantly across regions. Statewide, the average home value is $231,050, marking a 0.4% year-over-year increase. Notably, the Birmingham metro area experienced a 5.8% year-over-year rise in median prices, reaching $287,400 in Q1 2026. The statewide inventory is around 2.8 months, up 12% from the previous quarter, indicating a slowly improving supply.

Tennessee’s Knoxville is expected to see a 3-5% growth in home prices, supported by strong local economic fundamentals. Additionally, Knoxville is projected to be a top destination for movers, with a high ratio of inbound movers to those leaving.

While specific data for Georgia wasn’t available, the state is likely to follow regional trends of moderate appreciation, improved inventory, and steady buyer demand.

Inventory & Buyer Demand Dynamics

Nationally, the National Association of Realtors (NAR) forecasts a 14% rise in home sales and a 4% increase in prices in 2026. Mortgage rates are expected to ease to around 6%, contributing to improved buyer demand.

In Alabama, the Birmingham metro area is experiencing a tight supply with 2.1 months of inventory, while the statewide figure is slightly better at 2.8 months. Huntsville’s market is expected to see improving supply, providing more options for buyers.

Knoxville, Tennessee, benefits from strong inbound migration, which is likely to sustain buyer demand and contribute to the forecasted 3-5% price growth. This trend positions Knoxville as a vibrant market for both buyers and sellers.

As Georgia aligns with regional trends, improving inventory levels and steady demand are expected to characterize its housing market. This sets a promising stage for homebuyers and sellers to engage in the market.

Interest Rate Impacts on Affordability

Interest rates play a crucial role in housing affordability. In 2026, interest rates are expected to remain above 6% but gradually ease. Zillow anticipates rates staying at this level throughout the year, while Realtor.com projects an average of 6.3%.

However, there is good news for affordability. Realtor.com predicts that monthly payments will fall by 1.3%, with payments dropping below 30% of median income. This improvement in affordability is likely to attract more buyers into the market.

Fannie Mae’s projection of existing home sales rising by 9.6% further underscores the positive impact of easing rates on buyer activity. As mortgage rates fall to an estimated 5.9% by year-end, more prospective buyers might find it feasible to enter the housing market.

Market Forecasts & Strategic Opportunities

The 2026 housing market is expected to edge towards a more balanced state. Realtor.com forecasts an 8.9% increase in inventory, though supply remains below pre-2020 norms. A balanced market, with around 4.6 months of supply, offers strategic opportunities for buyers and sellers.

In Alabama, the mixed dynamics present opportunities in secondary markets like Huntsville, where improving supply could attract buyers seeking value. Birmingham’s tight supply suggests that sellers can benefit from pricing accuracy and strategic timing.

Knoxville’s strong inbound migration and anticipated price growth make it an appealing market for both investment and relocation. Buyers might explore opportunities in emerging neighborhoods, while sellers could capitalize on the high demand.

Georgia’s alignment with regional trends allows for strategic opportunities in areas with recovering inventory. Buyers and sellers can benefit from understanding local market conditions and timing their transactions accordingly.

For those navigating the real estate process, platforms like Homepoint offer insights into home searches and transaction strategies, providing resources for both buyers and sellers looking to optimize their market engagement.

Conclusion

In 2026, the Southeast housing market presents a complex but promising landscape. Alabama, Tennessee, and Georgia each offer distinct opportunities driven by regional trends. As buyer demand increases and interest rates ease, the market edges towards a more balanced state. Strategic opportunities lie in secondary markets, pricing accuracy, and timing, offering potential for both buyers and sellers to thrive. To navigate these opportunities effectively, engaging with resources like Homepoint can provide valuable insights and support throughout the real estate journey.