TUSCALOOSA, Ala. — Rents continue to rise in Alabama according to researchers at The University of Alabama and two other schools.
Eight out of 12 metro areas across the state recorded year-over-year increases higher than the national average of 3.4% in May according to the Waller, Weeks and Johnson Rental Index. Dothan and Florence doubled the national average, recording yearly increases of 12.7% and 8.0% respectively.
“Rents continue to rise as a result of stubbornly high mortgage rates,” 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.
Despite the yearly increases, the average rent in Alabama is $1,372, more than $600 cheaper than the national average. Waller noted while rents are cheaper across the Southeast compared to major metro areas such as New York and Los Angeles, renters are still feeling the financial strain.
According to the index, renters in Daphne need to make $68,095 to avoid being rent-burdened, the highest salary mark in the state. The Department of Housing and Urban Development, considers residents to be rent-burdened if they “pay more than 30% of their income for housing including utilities.”
Along with Daphne — Birmingham, Decatur and Huntsville — all recorded increases in the base salary households must make to avoid paying more than 30% of their income to rent.
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, added the rent-burdened metric to their monthly analysis of the most overvalued U.S. rental markets.
“The uncertainty of mortgage rates and the upcoming election are likely to influence mortgages rates staying elevated and as such rent prices,” Waller said.
Residents in New York, San Jose and Boston need to earn more than $120,000 to avoid being considered rent-burdened, according to the index.
“Increases in rents continue to exceed incomes in most areas in Alabama,” 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.
