TUSCALOOSA, Ala. — New data from the Waller, Weeks and Johnson rental index revealed that the average rent in Alabama is nearly 5% more expensive than the state’s predicted rate. According to the index, the average rent in March was $1,351, a $56 increase over the index’s rent prediction of $1,295.
The predicted rent rate uses data from Zillow’s Observed Rental Index to determine existing rents and statistically model historical trends from 2014.
“Increases in rent in eight of the twelve Alabama metro areas continue to outpace the national average of 3.6%,” Dr. Bennie Waller, the William Cary Hulsey Faculty Fellow in the UA Culverhouse College of Business and a research associate in the Alabama Center for Real Estate said.
While average rent in Alabama has increased 4.88% compared to March 2023, the slowing of month-to-month rent hikes has made rent more affordable, according to the index.
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.
In Alabama, residents must make an average of $54,054 to avoid being considered rent-burdened. Compared to the rest of the country, Alabamians save more than $25,000 as the affordability rate in the United States was $79,307 in March.
“While affordability in Alabama is significantly less than the US average, so is the median income,” Waller said.
Major metropolitan areas across the United States such as New York, Los Angeles, Houston and Atlanta recorded consecutive monthly rent increases for the first time since September 2023. As for Alabama, rental rates ticked up 0.14% since the start of 2024.
“With continued elevated home prices coupled with decreased housing supply and increased mortgage rates, many would-be homebuyers are choosing to rent which continues to elevate rental prices not only in Alabama but across the country,” Waller said.
Complete interactive data for both the U.S. and Alabama can be found on the ACRE Website.
The University of Alabama, part of The University of Alabama System, is the state’s flagship university. UA shapes a better world through its teaching, research and service. With a global reputation for excellence, UA provides an inclusive, forward-thinking environment and nearly 200 degree programs on a beautiful, student-centered campus. A leader in cutting-edge research, UA advances discovery, creative inquiry and knowledge through more than 30 research centers. As the state’s largest higher education institution, UA drives economic growth in Alabama and beyond.
