The Data Behind One of the Top Mortgage Markets in the U.S.
The materials available in this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your own advisors with questions regarding the Birmingham housing market content herein. The opinions expressed in this article are the opinions of the individual authors and may not reflect the opinions of MeridianLink, Inc.
Looking to give your mortgage portfolio a boost? You may want to consider Birmingham, Alabama. For lenders, the Birmingham housing market is bursting with opportunities to increase mortgage business. In fact, it’s home to one of the most affordable housing markets in the U.S. Let’s dive into the data and learn more about this promising southern city.
Dubbed The Magic City for its impressive history of rapid growth and transformation, Birmingham is still booming to this day. Its residential real estate market hits all the marks: affordable, investment potential, and it has an increasing housing inventory. This magical combination positions institutions to expand their lending presence and usher more potential buyers into homeownership.
Affordability Fuels Homeownership
Birmingham holds the title of the #1 cheapest mid-size city for homebuyers, making it an excellent market for buyers. With 54% of Birmingham home listings considered affordable, the city presents a compelling case for those seeking to capture more market share.
Even more appealing? The median sale price in Birmingham, as reported by Redfin, was just $213k in April 2025, significantly lower than the April 2025 national median of $438k.
Mortgage Payments Lower Than Rent
Those lower-than-average prices shake out to attractive monthly mortgage payments, too—especially when compared to average rental payments.
As rising rents continue to strain wallets, the Birmingham housing market offers a notable financial advantage to home buyers. The typical monthly mortgage payment is $153 less than the average rent for the area, providing immediate savings to homebuyers and increasing long-term financial stability.
This data signals a prime opportunity to reach buyers unaware that owning in Birmingham can cost less than renting. It also invites lenders to educate buyers on the financial advantages of homeownership over long-term renting.
Strong Market for Real Estate Investment
Those looking to purchase residential investment properties may want to take note of the Birmingham housing market, as well. In 2024, the city ranked #3 among the best cities to buy a rental property due to its successful revitalization efforts and expanding banking, education, and technology sectors. Potential tenants are continuing to stream into the area, too, with Birmingham rounding out RentCafe’s Top 30 U.S. Cities for Rental Activity at the 30th spot as recently as January 2025.
This presents a clear opportunity for financial institutions to market mortgages to investors eyeing Birmingham’s affordable, high-return rental market.
Housing Inventory on the Rise
While many cities struggle with limited housing supply, Birmingham has experienced an astonishing 144% growth in housing inventory between April 2022 and April 2025. More available homes increase buyer options and mortgage demand, creating growth opportunities and higher revenue for lenders and institutions.
Increased Buying Power
All these factors make for some serious purchasing power—roughly $75,000 more than the area’s average home price. That’s a whole lot of bang for your buyers’ bucks, allowing for larger or more desirable properties without stretching financial limits.
Positioning Your Institution for Success in Birmingham’s Mortgage Market
Birmingham’s growing housing inventory and affordability offer lenders a strong opportunity to expand their mortgage portfolios. But to fully capitalize on this momentum, your institution needs the right technology foundation. MeridianLink® Mortgage is a 100% browser-based LOS designed to help lenders overcome outdated systems and unlock real growth. With customizable workflow automation, built-in automated underwriting, debt optimization, and intelligent cross-sell tools, it delivers the digital efficiency today’s market demands.
See why more and more IMBs, banks, and credit unions are upgrading to our omnichannel, cloud-native mortgage tech to capture more business in growing markets—all while remaining efficient and cost-effective.
