BIRMINGHAM, Ala. (WIAT) — Right now, real estate agents say there’s a big demand for off campus housing in Tuscaloosa, but recent data from university researchers show rental costs are rising in SEC college towns.

Waller, Weeks and Johnson Rental Index shows rent prices in 14 SEC cities rose 8.22% over the last year. That’s double the national average of 4.11% over the last 12 months.

Even so, the data shows no city hosting an SEC institution has an average monthly rent costlier than the national average of $2,050 per month.

University of Alabama faculty and real estate researcher Dr. Bennie Waller said average rent prices in SEC college towns are still more affordable.

Average rent in Tuscaloosa rounds up to just over $1,486 a month.

“They’re paying about a 7% premium in Tuscaloosa relative to what our statistical model suggests. In Auburn, it’s a little more expensive. It’s $1,506 on average and it was more than twice the national year over year increase at 9.7%. So, Auburn rates are going up at a faster rate than Tuscaloosa at the moment.”

Dr. Waller said the reason we are seeing rental costs spike comes down to house prices and interest rates going sky high right now.

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He also said more people are competing for fewer rental properties, so it’s driving prices up.

Dr. Waller, alongside other researchers, anticipate mortgage rates will continue to rise, which would likely deter home buying, tightening that rental market even more.

“People are not willing to pay a 7% or 7.5% interest rate to buy a home, at least not at the moment. Maybe that will settle in and change but currently, more and more people are renting. And me personally, if I were to have to relocate, I would probably consider renting in the short run.”

He said what people need to watch out for is rent burden- those spending more than 30% of their income on rent according to HUD.  

The average income needed in SEC cities to avoid this is about $61,600, but Dr. Waller said the medium income in Alabama is around $58,000.

“These rent prices, we anticipate for them to continue to increase because mortgage rates are likely to continue to go up and it’s going to make it more tough on these individuals, and as you alluded to earlier, that’s going to leave less disposable income for other necessities in life such as food and entertainment and gasoline and automobiles and transportation in general.”

Dr. Waller said it’s tough for anyone to rent right now, but for students, many will have a roommate which will lessen rent pains to a degree.