TUSCALOOSA, Ala. — New reports from researchers at The University of Alabama, Florida Gulf Coast University, and the University of Mississippi indicate that despite Alabama’s rental growth, certain parts are staying below the national average.
In December, 13 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, Ozark, Talladega and Tuscaloosa) reported more than twice the national average with increases of 10.5%, 7.9%, 12.6%, 7.7%, and 7.7%, respectively.
“While overall inflation did slow, both housing and in particular, rental costs, continue to reflect above average increases,” said Dr. Bennie Waller, the William Cary Hulsey Faculty Fellow in the UA Culverhouse College of Business and research associate at the Alabama Center for Real Estate.
On the other hand, Alabama’s average rent remains below the national average of $1,958. The index reports the state’s average rent at $1,248 with Tuscaloosa, Daphne and Huntsville leading the state with an average of $1,600, still significantly below the national average. However, Gadsden, the only metro area with the only year-over-year decrease, continued its trend with an average rent of $858 and a decrease of 2.5% compared to last year.
According to the index, the household income required to avoid being rent-burdened in Alabama metro markets is more than $60,000 between Tuscaloosa and Daphne at $66,593 and $66,473, respectively. These amounts are still considerably less than the US average of approximately $78,600. 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.
“Housing expenses continue to be one of the largest financial burdens on family households,” Waller said.
11 of the 100 top U.S. markets require a household income of above $100,000 to avoid being rent-burdened. The Birmingham market holds a required income of nearly $53,600, still more than $25,000 lower than the U.S. average.
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.
