TUSCALOOSA, Ala. — Rents remain on the rise in Alabama according to researchers at The University of Alabama, Florida Gulf Coast University and the University of Mississippi.
In October, 12 of Alabama’s 17 metro areas recorded year-over-year rent increases above the national average of 3.3%, according to the Waller, Weeks, and Johnson rental index. Year-over-year rent increases in Auburn, Dothan, Jasper, and Tuscaloosa are more than twice the national average, with increases of 7.4%, 8.1%, 11.3%, and 7.0%, respectively.
“It appears that inflation in terms of rental prices is not subsiding,” said Dr. Bennie Waller, the William Cary Hulsey Faculty Fellow in the UA Culverhouse College of Business and a research associate at the Alabama Center for Real Estate. Waller goes on to say, “While these numbers are a bit shocking, it may not be all bad news. Rent prices are likely being driven by demand which means more people are looking to relocate to Alabama.”
Despite the yearly increases, Alabama’s average rent remains significantly below the national average of $2,009. Daphne recorded the highest average rent in Alabama in October at $1,798, an increase of just 2.5% from one year ago. However, Gadsden had the lowest rent among the state’s metro areas ($846) and saw a small decrease from October 2023 of just 0.99%.
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, and Tuscaloosa. These amounts are substantially less than the US average of approximately $82,500. Renters in Daphne need to make $71,901, 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 University of Mississippi, 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.
“While rental inflation has slowed in many parts of the U.S., rent prices remain high and in some cases unaffordable for many. In almost 30% of the top 100 MSAs, renters need to earn a minimum of $80,000 to avoid being “house-poor” or rent-burdened, according to HUDs definition,” Waller said.
Residents in eleven (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. The Birmingham MSA ranks 51st in terms of affordability with a required income of just under $58,000.
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.
