By KIM JARRETT | THE CENTER SQUARE
Rent increases, fewer available rentals, and average single-family home prices up nearly 17% demonstrate Alaska’s tight housing market, according to a new report.
Alaska saw rents up more than usual in three of its largest markets, including Anchorage recording its largest single-year increase in two decades, the Annual Renter Survey by the Alaska Department of Labor and Workforce Development shows.
In general, rent changes in urban Alaska have followed the national trend since last year, the report showed. In Alaska, the median adjusted rent was $1,276 at the time of the survey in March, up 8% from the previous year.
It’s possible recent cost increases since the survey was conducted will drive rents even higher than that, the report said. However, it went on to say rent is still affordable on average. The U.S. Department of Housing and Urban Development considers housing affordable if the occupants spend no more than 30% of their income on housing costs, the report said.
“While rents have risen everywhere since 2020, rising wages have made renting more affordable in all surveyed areas except Anchorage, where rent increases have outpaced average wage growth,” the report said.
Declining vacancy rates were attributed to several factors. The increase in home prices and interest rate hikes likely prevented renters from making the leap to becoming homeowners.
“Normally, the flow of renters buying homes each year steadily frees up rental units, but house prices jumped during the pandemic, pushing some prospective first-time buyers to keep renting longer,” the report said.
The price for a single-family house averaged over $388,000 in 2021, up almost 17% from 2019, according to the report.
“Interest rates increased sharply in early 2022 while home prices remained high, pushing the average monthly mortgage payment up and putting home buying even further out of reach for some,” the authors wrote.
Another likely factor contributing to low vacancies was emergency rental assistance, leading to fewer evictions and thus fewer available rentals.
The report also listed an increase in short-term rentals as a possible contributor.
“It’s not clear how many units in Alaska are moving from long-term to short-term, but national studies have found that in other parts of the country, short-term rentals can deplete long-term rental stocks. Anecdotally, our survey did suggest some Alaska units are transitioning to short-term rentals,” said the authors.
Meanwhile, there are more people moving out of Alaska than there are people moving in. Alaska’s gross migration rate has topped the list for the last 14 years in a row, according to Internal Revenue Service data. The gross migration rate represents the total number of people moving both in and out of the state.
Kim Jarrett’s career spans over 30 years with stops in radio, print and television. She has won awards from both the Georgia Press Association and the Georgia Association of Broadcasters.