TUSCALOOSA, Ala. — A new study from researchers at The University of Alabama, Florida Gulf Coast University, and the University of Mississippi shows that while rental prices are rising across the country, many areas in Alabama remain below the national pace of growth.
According to the Waller, Weeks and Johnson Rental Index, 7 of Alabama’s 19 areas experienced year-over-year rent increases above the national average in July. Alabama markets averaged 3.9% year-over-year growth, above the national average of 2.6%.
“While rental growth rates seem to be slowing on average nationwide, rent growth rates in Alabama continue to grow at a rate above the national average”, said Dr. Bennie Waller, in the UA Culverhouse College of Business and a research associate in the Alabama Center for Real Estate at UA. “In fact, 43% of MSAs saw an increase in rent growth rates less than the national average. Six MSAs saw a decline in growth rates.”
Alabama’s average rent remains well below the national figure of $2,072. Only Auburn and Daphne reported average rents over $1,600. Huntsville was the only area in the state with a year-over-year decline in average rent, but the decline was very slight (-0.1%).
The study also looked at household income levels needed to avoid being classified as “rent-burdened,” a term used by the Department of Housing and Urban Development for those spending more than 30% of their income on housing, including utilities. In Alabama, the average income required to avoid being rent burdened is around $55,800. Auburn and Daphne again have the highest income requirements in the state, at $76,737 and $69,067, respectively—still well below the U.S. average of $82,873.
Nationally, 13 of the top 100 rental markets require household incomes over $100,000 to avoid rent burden. In comparison, Birmingham’s threshold is about $59,336—still more than $20,000 below the national 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.
