TAMPA, Fla. (WFLA) — The scale of the problems facing American residents to find affordable housing has grown to the point where not only is it bad in the U.S., a new study says the prices are bad in the whole world. To top that off, Tampa is one of the cities at the tip-top of the negative affordability ranking, according to Online Mortgage Advisor.
According to the mortgage study, Tampa is not only the fourth worst place in the U.S. for rental affordability, it’s the ninth worst in the world. Tampa renters reportedly have to spend close to half their monthly income on rent alone. All this while the number of places to rent or buy continue to decrease as a historically stressed housing inventory remains on a downward trend.
From the international study, all of the top 10 cities with “worst change[s]” to affordability were in the U.S. In Florida, only Jacksonville was worse than Tampa for how much the affordability gap has grown. In addition to price increases, the cost change has limited how much space you can afford to rent.
| Rank | City | 2017 sq ft | 2021 sq ft | 2017/2021 Difference |
|---|---|---|---|---|
| 1 | Cleveland, OH, United States | 151.3 | 88.3 | -63.0 |
| 2 | Oklahoma City, OK, United States | 97.3 | 41.8 | -55.5 |
| 3 | Jacksonville, FL, United States | 82.3 | 42.6 | -39.7 |
| 4 | Boise, ID, United States | 60.6 | 22.2 | -38.4 |
| 5 | Las Vegas, NV, United States | 79.8 | 50.3 | -29.5 |
| 6 | Sacramento, CA, United States | 41.9 | 17.6 | -24.3 |
| 7 | Reno, NV, United States | 56.4 | 38.9 | -17.4 |
| 8 | Louisville, KY, United States | 59.3 | 43.3 | -16.0 |
| 9 | Tampa, FL, United States | 54.4 | 39.6 | -14.8 |
| 10 | Raleigh, NC, United States | 59.5 | 45.1 | -14.4 |
Put plainly, “A local here [in Tampa] can afford 14.8 square feet less in 2021 than 5 years ago,” according to Online Mortgage Advisor’s study. In Jacksonville, that drop was 49.7 square feet. From the same study, Tampa had the fourth worst change in renting affordability in the whole of the U.S.
| Rank | City | 2017 Rent % of Pay | 2021 Rent % of Pay | 2017/2021 Difference |
|---|---|---|---|---|
| 1 | Boise, ID, United States | 29% | 51% | 21.7% |
| 2 | Reno, NV, United States | 33% | 42% | 9.5% |
| 3 | Milwaukee, WI, United States | 29% | 36% | 6.2% |
| 4 | Tampa, FL, United States | 36% | 42% | 5.2% |
| 5 | Las Vegas, NV, United States | 27% | 32% | 4.8% |
| 6 | Sacramento, CA, United States | 37% | 41% | 4.4% |
| 7 | Cleveland, OH, United States | 28% | 32% | 4.0% |
| 8 | Colorado Springs, CO, United States | 26% | 29% | 2.9% |
| 9 | Oklahoma City, OK, United States | 30% | 33% | 2.7% |
| 10 | San Antonio, TX, United States | 29% | 32% | 2.6% |
Tampa renters are spending 42% of their money on just rent. From prices going back five years ago, renters in the city are spending 6% more proportionally than they used to. While not a large increase when taken year-over-year, the cost difference accompanies increased wages and record-high inflation in 2021 and 2022.
While Jacksonville had a higher rank on the square foot to lost affordability ratio, the city actually had a decrease in average rental costs in 2021. The study found Jacksonville average rent per month had gone down 11% from 2017 to 2021. Falling inventory makes the price increases and lower amounts of space.
Month-to-month, the available supply of housing inventory in Tampa has dropped 33%, according to RE/MAX, and 45.5% year-over-year. The monthly home sale transactions dropped 26.1% and sales prices were up 26.4% year-to-year as of January. Across the country, RE/MAX said “inventory remains historically low.” For the past three months, from November to January, each month has “rest the mark for lowest inventory in the las five years.”
A house that would’ve sold in Tampa for $265,000 in January 2021 is now selling for $335,000, when comparing median prices. Tampa is the fourth on a top five rank for markets with biggest yearly price increases.
| Market | Jan. 2022 Median Sale Price | Jan. 2021 Median Sale Price | Y/Y % Change |
|---|---|---|---|
| Phoenix, Ariz. | $436,995 | $340,000 | 28.5% |
| Raleigh-Durham, N.C. | $393,000 | $306,000 | 28.4% |
| Salt Lake City, Utah | $501,550 | $395,900 | 26.7% |
| Tampa, Fla. | $335,000 | $265,000 | 26.4% |
| Las Vegas, Nev. | $400,000 | $320,000 | 25% |
Year versus year inventory issues abound, down 22% in Tampa as of January, according to Zillow’s latest housing study.
The real estate company reported home values across the country have risen about 20% in the past year, a 20-year high. They said the increase in prices is “accelerating by the month.” In Tampa, it’s even faster, with a 30.5% rise over the past year, up 2.4% since December. From the end of 2021 to January, Zillow said Tampa’s inventory dropped 9.4% in a month, down almost 50% compared to January 2020.
Zillow also reported “new inventory is down 9.1% over the year and down 12.5% since December.” Fewer homes can be built due to supply chain snarls and price increases and some material costs have risen as much as 20%, according to the Bureau of Labor Statistics’ Producer Price Index.
The company says the rising market heat is “widespread,” with 38 of the country’s 50 largest metro areas seeing “home value growth” speed up in recent months. Among the largest areas in the U.S., the top three fastest growing markets were Austin, Texas and two Florida metros, Fort Myers and Sarasota.
The market is reacting to inflation across the U.S., with interest rates for mortgages rising again. A 15-year fixed rate mortgage is now 3.15%, while 30-year mortgages continue to inch closer to 4%, now at 3.92%, according to Freddie Mac, one of two federally-backed mortgage companies.
With inflation still the dominant economic concern, the Federal Reserve remains on the hook to find ways to fight off inflation. So far, the U.S. Central Bank has announced plans to institute three rate hikes in 2022, the first planned one to occur in March. At this stage, the exact amount it’ll increase has yet to be announced. The increased rates have been on the Fed’s radar since December.
While costs increase across the board, rent is no exception. Zillow reported rent in Tampa had gone up 28.2% over the past year, with their study finding monthly costs at about $1,975 per month. The increase in rent is happening across the U.S., as the national inflation rate remains on an upward trend. The country’s inflation hit 7.5% in February, but was even higher in Tampa at 9.6%.
Zillow forecasted that “typical” home prices could reach as high as $380,000 by the end of January 2023. Those numbers are preliminary, as the market remains in flux.
