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 September, 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. Year-over-year rent increases in Auburn, Decatur, Anniston, and Jasper are more than twice the national average, with increases of 9.8%, 7.1%, 6.8%, and 10.8%, respectively.
“While average rents are increasing at a slower rate nationally, average metro rents in Alabama continue to grow at almost 2% higher than U.S. average of 3.3%,” 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 the yearly increases, Alabama’s average rent remains significantly below the national average of $2,050. Daphne recorded the highest average rent in Alabama in September at $1,812, an increase of just 2.6% from one year ago. Gadsden had the lowest rent among the state’s metro areas ($879) and saw a small increase from September 2023 of just 1.1%.
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, Cullman and Tuscaloosa. These amounts are substantially less than the US average of approximately $82,500. Renters in Daphne need to make $72,494, 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.
“Sixty-two percent of the top 100 MSAs report year-over-year increases above the national average and 74% above the Federal Reserve’s target inflation rate of 2.5%. Twenty-three percent of MSAs had over 5% year-over-year increases while only 2 MSAs reported declining rents,” 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 20th 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.
