Tampa tenants spend nearly half their wages on rent as inventory dwindles, study finds

TAMPA, Fla. (WFLA) – The scale of the problems American residents face finding affordable housing has grown to the point that not only is it bad in the United States, but a new study indicates that prices are bad in the whole world. To top it all off, Tampa is one of the top cities on the negative affordability ranking, according to Online Mortgage Advisor.

According to the Mortgage Study, Tampa is not only the fourth worst place in the United States for rent affordability, it’s the ninth worst in the world. Tampa renters are expected to spend nearly half of their monthly income on rent alone. All this while the number of homes available for rent or purchase continues to decline as a historically tight housing stock remains on a downward trend.

According to the international study, all the top 10 cities with “the worst change[s]to affordability were in the US In Florida, only Jacksonville was worse than Tampa for how much the affordability gap grew. In addition to price increases, the change in cost has limited the amount of space you can afford to rent.

Rank Town 2017 square feet 2021 square feet Difference 2017/2021
1 Cleveland, Ohio, USA 151.3 88.3 -63.0
2 Oklahoma City, OK, USA 97.3 41.8 -55.5
3 Jacksonville, Florida, USA 82.3 42.6 -39.7
4 Boise, ID, United States 60.6 22.2 -38.4
5 Las Vegas, Nevada, United States 79.8 50.3 -29.5
6 Sacramento, California, United States 41.9 17.6 -24.3
7 Reno, Nevada, United States 56.4 38.9 -17.4
8 Louisville, Kentucky, USA 59.3 43.3 -16.0
9 Tampa, Florida, United States 54.4 39.6 -14.8
ten Raleigh, North Carolina, USA 59.5 45.1 -14.4
(Source: Mortgage Advisor Online)

In other words, “A local here [in Tampa] can afford 14.8 square feet less in 2021 than 5 years ago,” according to the Online Mortgage Advisor study. In Jacksonville, that drop was 49.7 square feet. According to the same study, Tampa had the fourth worst change in rental affordability in the entire United States.

Rank Town 2017 Rent % of salary 2021 Rent % of salary Difference 2017/2021
1 Boise, ID, United States 29% 51% 21.7%
2 Reno, Nevada, United States 33% 42% 9.5%
3 Milwaukee, Wisconsin, USA 29% 36% 6.2%
4 Tampa, Florida, United States 36% 42% 5.2%
5 Las Vegas, Nevada, United States 27% 32% 4.8%
6 Sacramento, California, United States 37% 41% 4.4%
7 Cleveland, Ohio, USA 28% 32% 4.0%
8 Colorado Springs, Colorado, United States 26% 29% 2.9%
9 Oklahoma City, OK, USA 30% 33% 2.7%
ten San Antonio, TX, USA 29% 32% 2.6%
(Source: Mortgage Advisor Online)

Tampa renters spend 42% of their money on rent. Compared to prices five years ago, tenants in the city are spending 6% more proportionally than before. While not a significant year-over-year increase, the cost difference comes with rising wages and record inflation in 2021 and 2022.

While Jacksonville ranked higher on the ratio of square foot to affordability lost, the city actually saw a decrease in average rental costs in 2021. The study found that Jacksonville’s average monthly rent had decreased by 11% from 2017 to 2021. The drop in inventory makes the price increases and space decrease.

On a month-to-month basis, available housing supply in Tampa fell 33%, according to RE/MAX, and 45.5% year-over-year. Monthly home sales transactions fell 26.1% and sales prices rose 26.4% year-over-year in January. Nationwide, RE/MAX said “inventory remains at historic lows.” Over the past three months, from November to January, each month “remained the mark of the lowest inventory in the past five years.”

A house that would have sold in Tampa for $265,000 in January 2021 now sells for $335,000, comparing median prices. Tampa is fourth out of a top five for markets with the highest annual price increases.

Marlet January 2022 Median Selling Price January 2021 Median Selling Price Year-over-year % change
Phoenix, Arizona. $436,995 $340,000 28.5%
Raleigh-Durham, North Carolina $393,000 $306,000 28.4%
Salt Lake City, UT $501,550 $395,900 26.7%
Tampa, Florida. $335,000 $265,000 26.4%
Las Vegas, Nevada $400,000 $320,000 25%
(Source: RE/MAX National Housing Report)

Year-over-year inventory issues abound, down 22% in Tampa in January, according to Zillow’s latest housing study.

The real estate company said home values ​​across the country have risen about 20% in the past year, a 20-year high. They said the price increase is “accelerating month by month”. In Tampa, it’s even faster, rising 30.5% over the past year, up 2.4% since December. From late 2021 through January, Zillow said Tampa stocks fell 9.4% in one month, down nearly 50% from January 2020.

Zillow also reported that “new inventory was down 9.1% on the year and 12.5% ​​since December.” According to the Bureau of Labor Statistics Producer Price Index, fewer homes can be built due to supply chain issues and price increases, and some material costs have increased by up to 20%.

The company says the growing market heat is “widespread,” with 38 of the nation’s 50 largest metropolitan areas seeing “home value growth” accelerating in recent months. Among the largest regions in the United States, the top three fastest growing markets were Austin, Texas, and two Florida metropolises, Fort Myers and Sarasota.

The market reacts to inflation in the United States, with mortgage interest rates rising again. A 15-year fixed-rate mortgage is now 3.15%, while 30-year mortgages continue to edge closer to 4%, now at 3.92%, according to Freddie Mac, one of the two lenders federally backed mortgages.

With inflation still the dominant economic concern, the Federal Reserve remains on the hook to find ways to fight inflation. So far, the U.S. central bank has announced plans to institute three rate hikes in 2022, with the first scheduled for March. At this point, the exact amount of this increase has not yet been announced. The rate hike has been on the Fed’s radar since December.

As costs rise across the board, rent is no exception. Zillow reported that rent in Tampa has risen 28.2% over the past year, with their study finding monthly costs of around $1,975 per month. Rising rents are occurring across the United States as the national inflation rate remains on an upward trend. The nation’s inflation hit 7.5% in February, but was even higher in Tampa at 9.6%.

Zillow has projected “typical” home prices could hit $380,000 by the end of January 2023. These numbers are preliminary, as the market is still in flux.