Alabama & Southeast Outlook- 2026

What the data suggest

In Alabama, average rent growth has been stronger than the national average — for example in July 2025 the state averaged ~3.9% year-over-year rent increases compared to ~2.6% nationally.

ACRE - Alabama Center for Real Estate

Alabama remains relatively affordable compared to many U.S. metros: rental rates and household income thresholds to avoid being “rent-burdened” are well below national levels.

ACRE - Alabama Center for Real Estate

Some markets in Alabama (like Mobile, AL) are flagged for potential near-term appreciation and growth in rental demand, driven by job growth, infrastructure investment (for example port expansion in Mobile) and population migration.

Jaken Finance Group

On the supply side, while there is still demand, some data suggest that new construction (especially multifamily) is catching up in portions of the Southeast (including Alabama). In some markets like Huntsville, AL, for example, there’s concern that supply may narrow the gap between supply and demand by 2026.

Matt Curtis Real Estate

What to expect by 2026

Modest rent growth: Given Alabama’s current trajectory and national forecasts for 2025-2026, landlords should expect modest but steady rent growth, likely in the range of 2%-5% annually in many Alabama markets. The strong affordability and steady migration in the state support this.

Continued demand for rentals: Because affordability remains a challenge for many would-be homeowners, rental demand should remain healthy. Especially in areas with job growth and in counties/metros where inventory remains constrained.

Competitive markets in select sub-areas: Some Alabama sub-markets (coastal areas, student-driven markets, job hubs) may outperform — for example Mobile and Tuscaloosa have been pointed out as potentially strong opportunities.

Jaken Finance Group

Watch supply growth: While demand stays solid, the risk is that if new rental units or multifamily developments come online in large numbers, this could temper rent growth. Landlords in markets where construction is robust need to keep an eye on vacancy and tenant retention.

Affordability remains a strength: Alabama’s lower cost structure (housing, taxes, cost of living) will continue to make it attractive for renters and investors. This provides a buffer vs markets where affordability is severely stretched.

Alabama Association of REALTORS

What Landlords Should Do

Focus on quality & differentiation: With moderate growth likely, landlords who offer well-maintained, desirable units (location, amenities, condition) will have more pricing power.

Plan for rising operating costs: Even if rent growth is moderate, expenses (maintenance, insurance, utilities) may rise—so factor cost inflation into your budgeting.

Keep an eye on supply: Monitor new construction in your metro/zip code. If a wave of new units is slated to hit market 2025-26, you may face more competition.

Use location-specific opportunity: In markets like Mobile or Tuscaloosa, where job/infrastructure growth is noted, you might find above-average performance. Consider whether your property is in one of those growth segments.

Maintain flexibility: Because macro factors (interest rates, the Fed, economic growth) remain uncertain, build flexibility in your pricing and capital improvement plans.