Birmingham-Hoover, AL
The lowest-unemployment metro in the queue. Birmingham runs 2.2% unemployment — the tightest of any metro this session, by a wide margin. HPI +44.7% over 5 years on a $226,200 median home. Cap rate proxy 4.37% borderline workable, P/I 3.25 borderline affordable. Permit YoY +59.7% — massive acceleration. Migration essentially flat at −853. The catch: Birmingham ranks #12 of 12 within Alabama for 5-year HPI — Huntsville and the smaller Alabama metros all ran harder.
The numbers that matter most
What an investor checks first when sizing up a new metro — affordability ratio, rent vs income, cap rate proxy, and where the market is moving. Each metric shown vs. state and national medians for instant context.
moderate
Price to income
3.25×
The single most-cited 'is this market still cheap' check. Below 3× and you're in an affordability tailwind.
- vs Alabama
- 3.03×
- vs U.S.
- 3.43×-0.18
Benchmark
ACS median home value ÷ median HHI
comfortable
Rent to income
21.8%
What share of a typical household's income goes to rent. Below 30% means tenants can absorb modest rent increases.
- vs Alabama
- 20.8%
- vs U.S.
- 23.3%-1.5
Benchmark
(HUD FMR 2BR × 12) ÷ median HHI
deal-by-deal
Cap rate proxy
4.4%
Rough first-pass yield assuming a 35% expense ratio. Not an underwriting number — a 'is this even worth modeling' filter.
- vs Alabama
- 4.4%
- vs U.S.
- 4.4%+0.0
Benchmark
(FMR 2BR × 12 × 0.65) ÷ ACS median home value
shrinking
Net migration
-0.08%
Forward-looking demand signal. Positive net migration drives rent growth and absorbs new supply.
- vs Alabama
- 0.04%
- vs U.S.
- 0.04%
Benchmark
IRS net migration ÷ population
pipeline accelerating
Permit pipeline
3.82
permits per 1,000 residents
Forward-supply indicator. Above ~5 means the metro is building meaningfully relative to its size; below 2 means supply is tight.
- vs Alabama
- 2.50+1.33
- vs U.S.
- 3.49+0.34
Benchmark
Census BPS permits TTM ÷ population × 1,000
very tight labor market
Unemployment
2.2%
Tighter unemployment means higher wages, more rental demand, lower vacancy.
- vs Alabama
- 2.2%=
- vs U.S.
- 4.0%-1.8
Benchmark
BLS LAUS, latest month
Section index — click any row to jump
What the data says about Birmingham
Birmingham is the lowest-unemployment metro in the queue. Across 6 counties — Jefferson at the core plus Shelby, St. Clair, Blount, Chilton, Bibb — the metro packs 1.11 million residents with a household income of $69,627 (Census ACS) and a median home value of $226,200 — among the cheapest in the queue. The HUD Fair Market Rent for a 2-bedroom is $1,266. The House Price Index ran +44.7% over five years (FHFA HPI) — well above the U.S. metros average of +34.3%.
The interesting fact is that Birmingham runs 2.2% unemployment — the lowest of any metro in the queue, by a wide margin. The Birmingham labor market is structurally tight, anchored by UAB (the University of Alabama at Birmingham, the largest single employer in the state), Regions Bank HQ, and the steel/auto-supply belt. Inside Alabama, however, Birmingham ranks #12 of 12 for 5-year HPI — Huntsville (the rocket metro), Tuscaloosa, Mobile, and Montgomery all ran harder. The slow appreciation is paired with the tightest fundamentals.
The 6-county geometry concentrates pipeline in 2 counties:
- Jefferson County (672K pop, $224,900 MHV) leads with 2,398 permits TTM = 3.57 per 1,000 — Birmingham proper plus Hoover, Vestavia Hills, Mountain Brook, Bessemer. 56% of the metro pipeline.
- Shelby County (224K pop, $298,700 MHV) is the densest exurb at 1,336 permits = 5.97 per 1,000 — Pelham, Alabaster, Helena, Calera. The affluent southern suburb and the metro's growth engine. The most expensive county.
- St. Clair County (92K pop, $218,500 MHV) builds 425 permits = 4.63 per 1,000 — Pell City, Springville, Moody. Eastern exurban growth on I-20.
- Blount, Chilton, Bibb combined add fewer than 100 permits — small rural counties.
Birmingham runs 3.82 permits per 1,000 residents — slightly above the national 3.49. Permit YoY is +59.7% — a massive acceleration. The 73% single-family mix is typical Sun Belt-adjacent. The cap rate proxy is 4.37% — borderline workable, just below the 4.4% national.
What's changing: net IRS migration is −853 returns (IRS SOI) — essentially flat, −0.08% of population. Owner-occupancy 70.6% (top tier in the queue), bachelor's-or-higher 33.2%. Inside Alabama, Birmingham is #1 by population, #2 by permits, #12 of 12 by 5-year HPI — last in HPI but the structural anchor of the state's economy.
What does an investor do?
- If you're hunting cash flow: Birmingham works. 4.37% cap proxy on a $226K median is one of the most workable in the queue. Look at Jefferson County's east-side neighborhoods (Crestwood, Eastlake, Woodlawn) and Bessemer/Hueytown for $130K-$200K SFR with workable rent ratios.
- If you're playing appreciation: Birmingham is the wrong AL bet — Huntsville or Tuscaloosa are the appreciation plays. But Shelby County (Hoover, Pelham) is the local growth pocket if you want to stay in Birmingham metro.
- If you already own here: Hold. The 2.2% unemployment is structural — UAB and Regions don't move. The cycle is mature but not over. Birmingham is the labor-anchored, slow-growing rust-to-Sun-Belt transition metro — boring on appreciation but fundamentally sticky.
Where prices are and where they've been
FHFA House Price Index — repeat-sales index across the metro, sized against this metro's median household income and benchmarked against the Indiana metros average and U.S. metros average.
5-year price appreciation
+44.7%
FHFA HPI · Q1 2020 → Q4 2025
+2.9% YoY
$226,200 median home value
Birmingham home prices climbed 44.7% over the last 5 years according to the FHFA repeat-sales index — a steady appreciation pace for a Midwest metro of this size. The 1-year change of 2.9% suggests steady appreciation continuing.
See the chart below for how the metro's appreciation curve stacks up against the Indiana metros average and the U.S. metros average. The gap between the metro and the national line is the "catch-up" or "lag" signal — and the slope tells you whether the gap is widening or closing.
How to read it
- 01Birmingham ran **+44.7% over five years** — well above the U.S. metros average of +34.3%, but solidly mid-pack relative to most metros in the queue.
- 02Inside Alabama, Birmingham ranks **#12 of 12** for 5-year HPI — last in its own state. Huntsville (rocket metro), Mobile, Tuscaloosa, and Montgomery all ran harder.
- 03**Recent YoY is +2.88%** — moderate, slowing but still positive. Not in the Midwest accelerator tier but not negative either.
- 04U.S. metros ran **+34.3%** over the same window. Birmingham outperformed by ~10pp.
- 05The takeaway: Birmingham is **the bottom of Alabama by HPI** but the **top of the queue by labor market tightness** (2.2% unemployment). The slow appreciation is paired with very strong fundamentals.
Where the value tier sits — top 5 counties by home value
| County | Median home value | Median HHI | Price-to-income | Verdict |
|---|---|---|---|---|
| Shelby County | $298,700 | $93,543 | 3.19× | moderate |
| Jefferson County | $224,900 | $64,589 | 3.48× | moderate |
| St. Clair County | $218,500 | $78,993 | 2.77× | affordable |
| Blount County | $169,700 | $61,096 | 2.78× | affordable |
| Chilton County | $142,300 | $61,873 | 2.30× | affordable |
How to read the FHFA House Price Index
FHFA HPI is a repeat-sales index — it tracks the price change of the same properties over time, smoothing out new construction and luxury transactions. It's built from the mortgage data the GSEs (Fannie Mae, Freddie Mac) already see, which makes it free of MLS survey error and immune to listing-feed gaps.
- 01Repeat-sales method. Tracks the same properties over time, so new construction and luxury transactions don't skew the trend.
- 02Federally sourced. Built from GSE mortgage data — no MLS survey error, no commercial license required to publish.
- 03Slope, not level. Watch the slope of the line, not the absolute index value — a steepening curve is a more reliable buy signal than the level.
The rent ladder
HUD Fair Market Rent by bedroom count, sized against this metro's median household income and benchmarked vs Indiana and the U.S.
Typical 2-bedroom rent
$1,266
/ month · HUD FMR FY 2026
21.8% of median HHI
A typical 2-bedroom in costs the median household 21.8% of their income — 1.5 points below the U.S. average (23.3%) 1.0 points above Alabama (20.8%).
HUD calls anything above 30% "rent-burdened." This metro sits comfortably under that line, which means tenants can absorb modest rent increases — and landlords have headroom on rent hikes before pushing tenants out of the market.
Fair Market Rent — by bedroom count
| Bedroom | Monthly | Annual | % of median HHI | Verdict |
|---|---|---|---|---|
| 1 BR | $1,155 | $13.9K | 19.9% | comfortable |
| 2 BR | $1,266 | $15.2K | 21.8% | comfortable |
| 3 BR | $1,583 | $19.0K | 27.3% | moderate |
Why HUD Fair Market Rent matters
FMR is HUD's 40th-percentile rent estimate by bedroom count — refreshed every fiscal year, sourced from Census surveys (not commercial listing data), and used as the cap for Section 8 voucher payments. Three things investors should know:
- 01Defensible benchmark. Federal source, no commercial license required to publish or compare against.
- 02Section 8 ceiling. A property at or below FMR is voucher-eligible — government-paid rent at the FMR cap.
- 03Conservative estimate. 40th percentile means more than half of actual market rents in the metro come in higher.
Labor market direction
U.S. Bureau of Labor Statistics — LAUS (unemployment) + CES (nonfarm employment), benchmarked against the U.S. average.
Unemployment rate
2.2%
BLS LAUS · latest month
Birmingham's labor market is tight, with unemployment running at 2.2% — 1.8 points below the U.S. metros average (4.0%).
For an investor, tighter unemployment means higher wages, more rental demand, and lower vacancy. The trend chart below shows how the metro's unemployment has moved over the last 30 months.
Unemployment rate
2.2%
Nonfarm jobs
—
Median household income
$69,627
ACS 5-year
How to read the labor market
Two BLS series tell you almost everything you need about a metro's labor market: LAUS (unemployment, refreshed monthly) and CES (nonfarm payroll counts, refreshed monthly). LAUS is the tightness signal; CES is the size and direction signal.
- 01Unemployment is rental demand. Tighter labor markets mean higher wages and lower vacancy — landlords have pricing power when employers are competing for workers.
- 02YoY change is the trend signal. A negative pp YoY change means the labor market tightened over the last year — usually a leading indicator for rent growth.
- 03Nonfarm growth is supply absorption. Positive nonfarm payroll growth absorbs new housing supply and supports the rent + price trajectory together.
What's being built
U.S. Census Bureau, Building Permits Survey — trailing 12 months, broken out by structure type, with the YoY change as the directional signal.
Total permits TTM
4,261
Census BPS · trailing 12 months
+59.7% year-over-year
3.82 permits per 1,000 residents
Birmingham pulled 4,261 building permits over the trailing 12 months, a meaningful jump 59.7% year-over-year. That works out to 3.82 permits per 1,000 residents, vs the U.S. metros average of 3.49.
Single-family vs multifamily mix matters: 5+ unit permits are lumpy (developers file for entire projects at once), while single-family permits are smoother and more reliable as a demand signal. The chart below breaks out the monthly mix.
Single family
3,125
trailing 12 months
2–4 unit
32
trailing 12 months
5+ unit
1,104
trailing 12 months
How to read the supply pipeline
Census BPS publishes building permit counts every month at the county level, by structure type. Single-family permits are the smooth signal — they reflect ongoing builder demand. 5+ unit permits are lumpy and project-level — one apartment approval can spike a month.
- 01Permits per 1,000 residents. The size-adjusted comparison number. Above ~5 means the metro is building meaningfully relative to its population; below 2 means supply is tight.
- 02YoY change is the direction. Year-over-year change in TTM permits tells you whether builders are leaning in or pulling back. Watch this number for trend reversals.
- 03Mix matters for cap rates. Heavy 5+ unit permitting tends to compress cap rates; single-family-dominated pipelines preserve them.
All 6 counties, ranked by population
Census Bureau (population, ACS demographics) + Census Building Permits Survey.
How to read it
- 01**Jefferson County leads with 2,398 permits TTM = 3.57 per 1,000** — Birmingham proper plus Hoover, Vestavia Hills, Mountain Brook, Bessemer. 56% of the metro pipeline.
- 02**Shelby County** (Pelham, Alabaster, Helena, Calera) builds **1,336 permits = 5.97 per 1,000** — the affluent southern suburbs and the metro's growth engine.
- 03**St. Clair County** (Pell City, Springville, Moody) builds **425 permits = 4.63 per 1,000** — eastern exurban growth on I-20.
- 04Blount and Chilton (small rural counties) combined add fewer than 100 permits.
- 05Birmingham runs **3.82 permits per 1,000 residents** — slightly above the national 3.49. **Permit YoY is +59.7%** — massive acceleration. Builders are catching up to the price action.
How to read the map
- 01**Shelby County (south) is densest at 5.97 per 1,000** — Pelham, Alabaster, Helena, Calera. Affluent southern suburb, the highest median home value in the metro at $298,700.
- 02St. Clair County (east) at **4.63 per 1,000** — Pell City, Springville. Suburban single-family.
- 03Jefferson County (the core) at **3.57 per 1,000** — moderate, but absolute volume is largest at 2,398 permits.
- 04Bibb, Blount, Chilton (small rural counties) all run below 1.5 per 1,000 — barely building.
- 05**The pattern is concentrated in the affluent southern suburb (Shelby) and the working core (Jefferson).** Most growth is happening south of Birmingham city — Hoover and the I-65 corridor.
| # | County | Population | Median HHI | Home value | Permits TTM | YoY |
|---|---|---|---|---|---|---|
| 1 | Jefferson County | 672,265 | $64,589 | $224,900 | 2,398 | +64.6% |
| 2 | Shelby County | 223,916 | $93,543 | $298,700 | 1,336 | +55.5% |
| 3 | St. Clair County | 91,719 | $78,993 | $218,500 | 425 | |
| 4 | Blount County | 59,077 | $61,096 | $169,700 | 15 | +66.7% |
| 5 | Chilton County | 45,140 | $61,873 | $142,300 | 82 | +310.0% |
| 6 | Bibb County | 22,251 | $51,215 | $132,600 | 5 |
Similar metros nationally
5 metros closest to Birmingham by population and median household income — head-to-head on the metrics that matter for an investor.
Peer set
5
metros nearest by population + HHI
Best in 1 of 2 comparable metrics
Birmingham is closest in size to Buffalo, Tucson, Rochester, Tulsa. best in class on Unemployment.
The table below ranks every metric — green cells mark the best value in the column, rust cells mark the worst. Birmingham is highlighted as the focal row.
| Metro | Pop | Med HHI | Home value | P/I | Cap proxy | HPI 5y | Permits/1k | Migration | Unemp |
|---|---|---|---|---|---|---|---|---|---|
★Birmingham | 1.11M | $70K | $226K | 3.25× | 4.4% | +44.7% | 3.82 | -0.08% | 2.2% |
Buffalo-Cheektowaga, NY | 1.16M | $71K | $210K | 2.97× | 5.0% | +57.7% | 1.06 | -0.18% | 4.0% |
Tucson, AZ | 1.04M | $68K | $287K | 4.22× | 3.8% | +55.1% | 4.44 | +0.21% | 4.1% |
Rochester, NY | 1.09M | $74K | $190K | 2.55× | 6.5% | +66.5% | 1.73 | -0.19% | 3.7% |
Tulsa, OK | 1.02M | $68K | $204K | 3.01× | 4.6% | +52.6% | 4.94 | +0.13% | — |
Fresno, CA | 1.01M | $72K | $363K | 5.05× | 3.6% | +47.8% | 2.31 | -0.08% | — |
How to read this comparison
Peer metros are picked by population + median household income — the closest five matches nationally — so the comparison is apples-to-apples on size and economic class. Sun Belt entrants like Las Vegas and Nashville are included when they fall in range, which is why this peer set spans both the Midwest and the Sun Belt.
- 01Green = best in column. The cell with the most-favorable value for that metric, accounting for whether higher or lower is better.
- 02Rust = worst in column. The cell with the least-favorable value. Combined with the green markers, this is your at-a-glance "where does my metro win and where does it lose."
- 03Cap proxy is the yield lens. Cap rate proxy = (FMR 2BR × 12 × 0.65) ÷ median home value. A first-pass yield filter, not an underwriting number — but it puts the peer set on a single comparable scale.
Where people are moving in from
IRS Statistics of Income — Tax Year 2022. Excludes intra-metro suburban churn.
Net migration
-853
tax returns · IRS SOI · TY 2022
-0.08% of metro population
5,028 from top origin
Birmingham was essentially flat on net IRS migration — losing −853 returns, −0.08% of population. The labor market is so tight (2.2% unemployment) that household formation is steady even without strong inflow. Migration neither helps nor hurts the price action here.
The IRS data lags by ~2 years (households file taxes the year after they move), but it's the only nationwide county-to-county migration data sourced from administrative records, not survey estimates. The table below shows the top origin counties — the gravitational sources of new residents.
Top origin counties — where new residents are coming from
| Origin county | Tax returns |
|---|---|
| Jefferson County, AL | 5,028 |
| Shelby County, AL | 3,054 |
| Tuscaloosa County, AL | 1,029 |
| St. Clair County, AL | 925 |
| Talladega County, AL | 486 |
| Blount County, AL | 458 |
Who lives in Birmingham
U.S. Census Bureau · American Community Survey 5-Year Estimates · 2019–2023 vintage.
Who lives here
- Median age
- 39.0
- Owner-occupancy
- 70.6%
- Bachelor's+
- 33.2%
Birmingham relatively young Midwest metro: Median age 39.0, 70.6% owner-occupancy 33.2% holding a bachelor's degree or higher. Stable, educated, and mostly homeowner-driven.
The catch: 45.9% of renter households are rent-burdened (paying 30%+ of income on rent) — high enough to flag as a constraint on rent growth even though the headline rent-to-income ratio looks comfortable.
- Median household income
- $69,627
- Median age
- 39.0
- Bachelor's+ degree
- 33.2%
- Owner-occupancy rate
- 70.6%
- Vacancy rate
- 11.9%
- Rent burdened (30%+)
- 45.9%
Data sources
| Metric | Source | Type | Vintage |
|---|---|---|---|
| Home prices | FHFA — House Price Index | Index | Q4 2025 |
| Fair market rents | HUD — Fair Market Rents | Administrative | FY 2026 |
| Unemployment rate | BLS — Local Area Unemployment Statistics | Survey | Dec 2025 |
| Nonfarm employment | BLS — Current Employment Statistics | Survey | Dec 2025 |
| Building permits | Census — Building Permits Survey | Survey | Mar 2026 TTM |
| Migration flows | IRS — Statistics of Income, Migration Data | Administrative | Tax Year 2022 |
| Demographics | Census — American Community Survey 5-Year | Survey | 2019–2023 |
| Household income | Census — American Community Survey 5-Year | Survey | 2019–2023 |
Page last refreshed: April 9, 2026