TUSCALOOSA, Ala. — Rents remain on the rise in Alabama, according to researchers at The University of Alabama, Florida Gulf Coast University and University of Mississippi.
Twelve out of 17 metro areas across the state recorded year-over-year increases higher than the national average of 3.4% in August, according to the Waller, Weeks and Johnson Rental Index. Rental increases in Auburn, Ozark, Decatur, Anniston, and Jasper were more than twice the national average, recording yearly increases of 12.0%, 11.8%, 8.3%, 8.1%, and 8.3%, respectively.
“Although inflation, according to the CPI, is easing, it doesn’t appear to be the case in housing, particularly in Alabama,” said Dr. Bennie Waller, the William Cary Hulsey Faculty Fellow in the Culverhouse College of Business and a research associate in the Alabama Center for Real Estate.
Despite the yearly increases the average rent in Alabama is significantly less than the national average of almost $2,100. Daphne had the highest average rent in Alabama during August ($1,779), but it only increased 2.4% from one year ago. Gadsden had the lowest rent among the state’s metro areas ($917), and saw a small increase from August 2023, rising just 0.9% year-over-year.
According to the index, the household income required to avoid being rent-burdened in Alabama metro markets is in excess of $60,000 in Auburn, Daphne, Cullman, Dothan and Tuscaloosa. These amounts are substantially less than the U.S. average of approximately $82,500. Renters in Daphne need to make $71,160, 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.”
Waller and fellow researchers Dr. Ken H. Johnson, the Christie Kirkland Walker Chair in Real Estate at the University of Mississippi, and Dr. Shelton Weeks, the Lucas Professor of Real Estate at Florida Gulf Coast University, added the rent-burdened metric to their monthly analysis of the most overvalued U.S. rental markets.
“Seventy-four percent of the top 100 MSAs report year-over-year increases above the Federal Reserve’s target inflation rate of 2.5%, while 27 MSAs saw yearly increases in rents above 5%,” Waller said.
Residents in 11 (six in California) of the top 100 markets need to earn more than $100,000 to avoid being considered rent-burdened, according to the index.
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.
