Alabama offers more than Southern charm—it’s also home to some of the most budget-friendly rental options in the country. Are you relocating for work, lifestyle, or family? There are growing opportunities for renters to find affordable homes across the state. Here's a look at the trends driving the market—and how you can take advantage of them.
The demand for affordable housing in Alabama is increasing. Why? Let's examine some current trends.
More people are moving to the state due to job growth and better living costs. This has led to higher competition for house rentals in Alabama. Alabama's job market has seen significant growth recently.
In October 2024, the Bureau of Labor Statistics recorded 133,000 job openings, up from 115,000 in September. The labor force participation rate also increased to 57.6% in October 2024, with nearly 80% of prime-age workers (ages 25-54) employed.
International investments have played a crucial role in this growth. Between 2015 and 2020, employment in Alabama linked to foreign direct investment (FDI) rose by 12%, compared to a 1% employment growth during the same period. Since 2020, FDI projects have accounted for nearly half of new capital investments and 40% of job commitments in the state.
These developments attracted more people, contributing to increased demand for affordable homes in Alabama.
Developers are building new homes for rent in Alabama to meet the demand. Some of these projects focus on middle- and low-income families. Programs like LIHTC (Low-Income Housing Tax Credit) encourage developers to offer lower rents in exchange for reduced tax liabilities.
Economic factors are also shaping the market and affecting the number of homes for rent in Alabama. Rising interest rates make buying homes harder, pushing more people to seek homes for rent in Alabama. As of January 25, 2025, the average 30-year fixed mortgage rate in Alabama was 6.75%, reflecting an upward trend over recent months.
This increases the pressure on the availability of houses to rent in Alabama. Rent prices are slowly rising in popular areas, but rural regions still offer lower-cost options.
Several cities with a low cost of living make them attractive options for those seeking affordable housing in Alabama. According to NewHomeSource, the top 10 most affordable cities in Alabama are:
Birmingham and Huntsville are two of Alabama’s biggest cities—and both offer a cost of living that’s lower than the national average. You get the perks of city life without the high price tag.
The Alabama Affordable Housing Act was created to increase affordable housing in the state. It established the Alabama Housing Trust Fund, which provides funding for projects designed to support families earning around 60% or less of the area’s median income.
The Alabama Department of Economic and Community Affairs (ADECA) manages the fund. They set the rules for how to distribute the money, using a competitive process. Programs like these help ensure more residents can find safe, stable places to live—regardless of income.
To qualify for low-income, affordable housing in Alabama, you must meet specific criteria set by the US Department of Housing and Urban Development (HUD) and local Public Housing Authorities (PHAs).
These include:
To apply, contact your local PHA to obtain and submit an applica
tion for a home to rent in Alabama. Be prepared to provide documentation such as proof of income, identification, and information about your household. Due to high demand, waiting lists are common, and approval times can vary from a few weeks to several months.
Living comfortably in Alabama is generally more affordable than in many other states. According to RentalData.org, the average rental for a studio is $665 and the average rent for a 4-bedroom home for rent in Alabama is $1,309. The cost of living in Alabama is also less than the US average.
You shouldn’t sacrifice quality or peace of mind to find a home that fits your budget. At ARK Homes for Rent, we believe everyone deserves a place that feels like home—without the stress or sky-high costs. Whether you're moving across the state or across the country, we’re here to help you find your next chapter in Alabama.
