Alabama

Summary

Alabama state is facing challenges to housing affordability. For every 100 low-income renter households, there are 80 units available that are affordable to them. The median household income in the state is $32,274 whereas the median rent in the state $630. Currently, the state is short over 29,830 low-income housing units, meaning rental units that are affordable to households earning ≤60% of AMI.

30.6% share of renter households
40.7% share of low-income households
41.2% share of rent-burdened households

Renter population data

Renters vs homeowners
Share of income spent on rent
Households
% share
Renter households
582,412
30.6%
Homeowner households
1,320,571
69.4%
Total households
1,902,983
100.0%
Low-income renter households

Renter households by income group
Households
% share
Extremely low-income
≤30% AMI
81,205
13.9%
Very low-income
31-50% AMI
69,868
12.0%
Low-income
51-80% AMI
86,145
14.8%
All low-income households
<80% AMI
237,218
40.7%

Rent-burdened households
Share of income spent on rent
Households
% share
Moderately rent-burdened
117,562
20.2%
30.0–34.9%
44,097
7.6%
35.0–39.9%
30,377
5.2%
40.0-49.9%
43,088
7.4%
Severely rent-burdened
122,559
21.0%
≥50.0%
122,559
21.0%
All rent-burdened households
240,121
41.2%

Affordable housing shortage

Rent vs median household income
Median household income
Amount ($)
in 2010
23,358
in 2021
32,274
Increase (2010–2021)
38.2%

Median rent
Median rent
Amount ($)
in 2010
452
in 2021
630
Increase (2010–2021)
39.4%

Affordable housing stock
Supply, demand & shortage
Units
Supply (current stock)
121,243
Demand (total units needed)
151,073
Shortage
29,830
total shortage
80.3%
supply/demand ratio

Availability of affordable rental units per 100 household
Moderate, middle & upper-income (>80% AMI)
Low-income (51-80% AMI)
Very low-income (31-50% AMI)
Extremely low-income (≤30% AMI)

Alabama Housing Finance Authority

Alabama Housing Finance Authority
7460 Halcyon Pointe Drive, Suite 200
Montgomery, AL 36117-8105

LIST OF loan programs

• Housing Credits & HOME
• CHDOs
• Housing Trust Fund
• Multifamily Bonds

QAP document (Qualified Allocation Plan)

QAP
Alabama
The QAP is a document that states, and a few local agencies, must develop in order to distribute federal Low Income Housing Tax Credits (LIHTCs), which can be awarded only to a building that fits the QAP’s priorities and criteria. Each QAP must spell out a housing finance agency’s (HFA’s) priorities and specify the criteria it will use to select projects competing for tax credits. The priorities must be appropriate to local conditions.

Download document

Housing news

How Fed Rate Cuts Impact the Housing Market

The Federal Reserve’s recent rate cuts will influence the housing market, but the effects won't be immediate. Although lower rates make borrowing more affordable, the ongoing housing shortage and existing conditions in the market remain tough obstacles.

Key Takeaways:

• Lower Mortgage Rates: Fed rate cuts have already reduced the average 30-year mortgage rate, which dropped from a peak of 7.79% in late 2023 to around 6.2%. This could ease the burden for homebuyers and those refinancing.
• Home Sales: As rates decline, more homeowners might be encouraged to sell, which could help alleviate some of the housing market’s stagnation. However, a full recovery of the resale market is expected to be gradual.
• Ongoing Supply Issues: Despite lower rates, housing supply shortages will persist, especially in high-demand areas. Supply constraints, driven by zoning restrictions and labor/material shortages, remain a barrier to affordability.

While the Fed’s actions are a positive step toward stabilizing the housing market, broader structural challenges—particularly the lack of new housing supply—will continue to affect the market.