TUSCALOOSA, Ala. — New reports from researchers at The University of Alabama, Florida Gulf Coast University, and the University of Mississippi indicate that despite rising rental costs across the nation, certain parts of Alabama are staying below the average growth rate.
In January, 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. Three of these metro areas (Auburn, Florence, and Ozark) reported more than twice the national average with increases of 9.0%, 10.7%, and 18.5%, respectively.
Alabama’s average rent remains significantly below the national average of $1,968, with the state’s average of $1,327 reflecting a nearly 40% difference. Auburn, Daphne, and Tuscaloosa lead the state with an average of nearly $1,600. No metro areas reported year-over-year decreases in rent. Additionally, Troy and Albertville did not have any reported historic data.
According to the index, the household income required to avoid being rent-burdened in Alabama metro markets is nearly $55,000 and Daphne, Tuscaloosa, and Auburn lead the state’s household income requirement at $64,342, $61,959, and $61,608, respectively. These amounts are still considerably less than the US average of approximately $78,700. 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.”
“Inflation remains elevated, and shelter costs accounted for almost 30% of overall inflation in the most recent report from the Bureau of Labor Statistics. Anniston, Florence, and Jasper were the most affordable rental markets in the state during January, but average rents are up 5.2%, 10.7%, and 4.2% from one year ago in these areas,” said Stuart Norton, Associate Director at the Alabama Center for Real Estate (ACRE).
Dr. Bennie Waller, the William Cary Hulsey Faculty Fellow in the UA Culverhouse College of Business and research associate at ACRE, 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.
11 of the top 100 U.S. markets require a household income of more than $100,000 to avoid being rent-burdened. The Birmingham market holds a required income of nearly $53,500, 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.
