TUSCALOOSA, Ala. — While rents continue to rise nationwide, new reports from researchers at The University of Alabama, Florida Gulf Coast University, and the University of Mississippi indicate that affordability persists in certain parts of Alabama.
In November, 12 of Alabama’s 17 metro areas reported year-over-year increases above the national average of 3.4%, according to the Waller, Weeks and Johnson rental index. Five of these metro areas (Florence, Jasper, Montgomery, Talladega and Tuscaloosa) reported increases more than twice the national average with increases of 10.4%, 10.4%, 7.1%, 7.3%, and 8.7%, respectively.
“These data points reflect that the Feds are right to be concerned about inflation returning, particularly in the housing rental markets,“ 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.
Despite these increases, Alabama’s average rent remains below the national average of $1,982. The index reports the state’s average rent at $1,310 with Daphne leading the state at $1,770. Continuing its streak for another month, Gadsden held the lowest rent in the state at $846 and saw a small decrease of nearly 3%.
According to the index, the household income required to avoid being rent-burdened in Alabama metro markets is in excess of $60,000 in Daphne, Tuscaloosa, and Auburn. These amounts are considerably less than the US average of approximately $79,300. However, Daphne holds the highest salary mark in the state requiring renters to make $70,819. 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, along with 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, added the rent-burdened metric to their monthly analysis of the most overvalued U.S. rental markets.
“Although not part of the top 100 MSAs, Gadsden and Anniston are two of the more affordable markets in the nation requiring incomes of $33,833 and $38,264 to avoid being rent burdened, as defined by the HUD,” Waller said.
Of the top 100 U.S. markets, 59 experienced year-over-year rent increases above the national average. The Birmingham market is ranked 13th in terms of affordability with a required income of nearly $54,700.
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.
