Since the outbreak of the COVID-19 pandemic in early 2020, the state of Alabama – colloquially known as the “Cotton State” – has made a comeback. With unemployment rates close to their all-time lows and average credit card debt sitting at just over $5,000, it boasts some of the most affordable places to live in the country. Despite this, new homeowners have still found it difficult to find a new home, much like in the rest of the nation.
Alabama Consumer Debt
According to the latest Household Debt report from the Federal Reserve, the following is a breakdown of the average consumer debt in Alabama by type.
Total household debt: $38,717
The number of Alabamians filing for bankruptcy decreased last year, with 18,127 compared to 26,809 the year before. This is good news for the state, as it indicates that fewer people are struggling financially.
Alabama’s employment and income
According to the most recent data, the average per-person income in the state of Alabama is $46,908. This figure falls just short of the national average of $59,729. The median household income in the state is $50,536. And the minimum wage in the state is on par with the federal minimum wage of $7.25.
In the state of Alabama, it is against the law to deny someone a job or to fire them because they are a member or not a member of a labor union. This has been the public policy of Alabama since 1953.
The coronavirus pandemic caused widespread unemployment across the U.S., but Alabama was hit particularly hard. In spring 2020, the unemployment rate in the state was 13%. However, as of March 2022, the rate has dropped to 3.1%. This is thanks in part to three major corporate growth projects that have picked up steam since August 2020 and created new job opportunities.
The cost of living in this state is lower than average, which helps to offset the slightly higher-than-average poverty rate. Senator Gerald Allen believes that one of the best ways to improve the workforce long-term is by investing in students – currently, only 25.5% of the population holds a bachelor’s degree or higher.
The unemployment benefits are as follows:
The minimum amount per week is $45
The maximum amount per week is $275
Benefits are available for a maximum of 26 weeks
Alabama Banking and Taxes
Income tax in the state of AL runs from 2-5%, with a standard sales tax of 4%. However, in the Banks zip code (36005), the sales tax rate increases to 7.5%. In the Pike region, which is also part of the 36005 zip code, the sales tax rate is 9%.
Compared to most states, Alabama has a relatively small number of residents with checking or savings accounts. In fact, 7.6% of the population does not have either type of account.
Housing Market in Alabama
In Alabama, the median home price is around $265,200, but the number of homes sold has fallen 2.7% and the number of homes for sale has dropped by 39.5%. Consequently, although affordable living is available, people have found the market tough to navigate, much like in other parts of the country during and after the pandemic.
In the state of Alabama, all homeowners are eligible for a homestead exemption of $15,000. This amount is doubled for married couples, joint owners, or joint filing spouses.
The majority of Alabamians are homeowners, with nearly 69% owning their own homes.
The average mortgage payment is $1,147.
The average rent payment is $792.
The median mortgage debt is $23,060.
Retirement planning can be a tricky process, but luckily there are states that make it a little easier on your wallet. According to a recent study, Alabama is the sixth-best state for retirement. The cost of living in Alabama is 13% below the national average and property taxes are some of the lowest in the country. Financial experts say that you’ll need around $713,000 to retire comfortably in Alabama.
Although the highest state income tax rate in AL is 5%, certain types of income, such as Social Security from traditional pension plans, are exempt from taxation. This can be beneficial for retirees, as 30% of elderly households rely on Social Security for at least 90% of their total income. Additionally, homeowners 65 or older are exempt from paying state property taxes. This means that the average retiree (62 years of age) would only need to wait 3 years to become eligible for this exemption.
Alabama Insurance Premiums
In the state of Alabama, it is estimated that over four million drivers are licensed. However, a staggering 19% of residents drive without insurance. This puts Alabama at 7th in the nation for the highest number of uninsured drivers. The yearly cost for auto insurance premiums in Alabama is, on average, $1,358. Although this is slightly lower than the national average of $1,674, having insurance in Alabama is crucial. This is because Alabama operates under an “at-fault” policy when it comes to car accidents. This means that the insurance company of the person found to be at fault for an accident is responsible for property damage and medical bills incurred by the other party involved.
As home insurance costs continue to rise, many homeowners are feeling squeezed. In Alabama, premiums have increased by more than 40% since 2010, and are now averaging $2,328 per year. This is significantly higher than what homeowners pay nationwide, which is currently around $1,680.
According to recent estimates, over half a million people in Alabama do not have health insurance. This is likely due to the high cost of premiums, which average over $500 per month ($6,000 per year). This makes Alabama one of the least affordable states for healthcare in the country.
Clearone Advantage, Credit Associates, Credit 9, Americor Funding, Tripoint Lending, Lendvia, Simple Path Financial, New Start Capital, Point Break Financial, Sagemore Financial, Money Ladder, Advantage Preferred Financial, LoanQuo, Apply.Credit9, Mobilend