TUSCALOOSA, Ala. — With marquee football matchups scheduled to take place across the Southeastern Conference this fall, fans looking to get a deal on where to stay for the big game may be disappointed as each conference city saw rent increase compared to last year, according to the Waller, Weeks and Johnson Rental Index.
Tuscaloosa saw a 7.8% increase in rent prices from 2022 while Auburn went up more than 9.6%, but both cities were outclassed by the two Egg Bowl participants. Oxford and Starkville, Mississippi led the SEC in rent increases during the year, recording a 20% and a 14% hike.
“SEC Football continues to drive demand for the rental market in SEC cities,” said Dr. Bennie Waller, in the UA Culverhouse College of Business and a research associate in the Alabama Center for Real Estate at UA. “Although the index doesn’t include short-term rental data, the rise in the rental index is associated with the exponential rise in demand for the short-term market.
“Oxford is just insane and expensive in terms of being overpriced. My take on it is there’s less real estate and as a result, prices are just sky-high. The people at Ole Miss are just as fanatical about football as they are in Tuscaloosa. It’s just a smaller school, so there are fewer housing opportunities and the prices keep going up and up and up.”
While the two major college football hubs in Alabama were cheaper to rent in compared to other SEC cities, both Tuscaloosa and Auburn once again saw monthly increases in June. The average rent cost in Tuscaloosa rose to $1,486, a .43% increase compared to last month. Auburn saw an even high price hike, going up .60% for an average rent of $1,606.
As a result, consumers in Tuscaloosa will need to earn $59,445 to not be rent-burdened while in Auburn they will need to make $64,223. Consumers are considered rent-burdened when they spend 30% or more of their incomes on rent, lessening the ability to pay for other necessities. Both metro areas serve as market indicators for the Yellowhammer state as all but two cities, Decatur and Enterprise, saw rent increases in Alabama.
“Lots and lots of people are moving to Alabama for growth, job opportunities and affordability,” Waller said. “I mean the affordability for Alabamians is still pretty high, but it’s not really that expensive compared to the rest of the country.”
The average rent in the United States is $2,054 which requires an annual income of $82,156 to avoid being rent-burdened. According to the index, rent prices fell slightly, bumping up .57% in June, but marked the third-consecutive month where the increase was higher than .50%.
Waller and fellow researchers Dr. Ken H. Johnson, an economist in FAU’s College of Business, and Dr. Shelton Weeks, the Lucas Professor of Real Estate at Florida Gulf Coast, recently added the rent-burdened metric to their monthly analysis of the most overvalued U.S. rental markets. They use leasing data from Zillow’s Observed Rental Index to determine existing rents and statistically model historical trends from 2014. Income information is taken from the Wisevoter project.
“Rents continue to increase at a pretty hefty rate,” Waller said. “The growth of rates may be slowing but they are still increasing. Depending on what the Fed is going to do at the next meeting, if interest rates are gonna go up again, which I do think they will, then I think mortgage rates are gonna go up again. That’s just going to continue to exacerbate the rental markets.”
Complete interactive data for both the U.S. and Alabama can be found here.
