TAMPA, Fla. (WFLA) — Nationally, the median asking prices for rent had gone up 15% year-over-year. Tampa’s median asking rent price hit $2,188 in May, a 22.4% jump, according to a rental data report by Redin. May was the first month where asking rent prices were over $2,000, according to the real estate company.
Redfin’s deputy chief economist, Taylor Marr, said the asking rent prices are rising alongside the rising mortgage rates, as inflation continues to increase. The Federal Reserve has increased rates twice in 2022 as a way to combat inflation. More rate hikes are planned.
“More people are opting to live alone, and rising mortgage-interest rates are forcing would-be homebuyers to keep renting,” Marr said. “These are among the demand-side pressures keeping rents sky-high. While renting has become more expensive, it is now more attractive than buying for many Americans this year as mortgage payments have surpassed rents on many homes. Although we expect rent-price growth to continue to slow in the coming months, it will likely remain high, causing ongoing affordability issues for renters.”
The average monthly rent in the U.S. in May was $2,002 according to Redfin. It was a 2% increase compared to April 2022.
Addressing the current living situations in the U.S., the Federal Reserve said on Monday that rising prices were pushing people to look for different housing options.
“In contrast, over the past year and a half there has been a remarkable rebound in the headship rate, driven in large part by a return to the pre-pandemic rates at which younger adults lived with parents or older family members. This rebound has been an important contributor to a huge increase in housing demand,” the Federal Reserve said. “From the end of 2019 through March 2022, real market rents and house prices have soared to record highs, even as permits for new residential construction have risen to their highest level since 2006.”
The rise in mortgage rates for a 30 year mortgage has added to the cost of buying a home. As of June 9, the rate had risen to 5.23%, up 0.14 points compared to the week before, according to Freddie Mac, a federally-backed mortgage company. The rate was 2.27 points higher compared to the year before.
“After little movement the last few weeks, mortgage rates rose again on the back of increased economic activity and incoming inflation data,” Sam Khater, Freddie Mac’s Chief Economist said. “The housing market is incredibly rate-sensitive, so as mortgage rates increase suddenly, demand again is pulling back.”
The next inflation report from the Bureau of Labor Statistics comes Friday, providing a look at the latest price fluctuations for consumers. The previous report for April showed a slight dip in inflation rate, with energy and fuel costs major drivers in the overall level of cost increases. As gasoline prices have continued to rise across the U.S., the rate reported tomorrow could have, once again, increased as a result of fuel costs.
According to Redfin’s report, the top 10 markets with the fastest rising rent costs were in Texas, Florida, and New York, as well as New Jersey, Tennessee, Washington, and Ohio.
Still, the changes in price and rising costs to rent or buy have risen faster in other areas. Tampa did not make the list of top increases.
- Austin, Texas (48%)
- Nashville, Tenn. (32%)
- Seattle, Wash. (32%)
- Cincinnati, Ohio (32%)
- Miami, Fla. (29%)
- Fort Lauderdale, Fla. (29%)
- West Palm Beach, Fla. (29%)
- New York, N.Y. (24%)
- Nassau County, N.Y. (24%)
- New Brunswick, N.J. (24%)
Of the 50 most populated areas in the country, Redfin reported only three had rent go down over the past year, through May. Those areas were Milwaukee, Wisc., Kansas City, Mo., and Minneapolis, Minn.