Rental Market in Florida Showing Signs of Stabilization Compared to National Average
After years of skyrocketing housing prices and rents in Florida, the rental market is finally showing signs of stabilization when compared to the national average. A recent study by Florida Atlantic University (FAU) and two other academic centers found that national rents increased by 3.57% annually, while all metropolitan areas in Florida experienced growth below that amount.
According to the latest data from the Waller, Weeks and Johnson Rental Index, which is a monthly report prepared in co-production by several universities in the state and Alabama, rental prices in the Miami metropolitan area, which includes Broward and Palm Beach, grew by 2.76% year-over-year. In 2023, the annual growth in prices had been a staggering 14.3%.
However, there are areas in Florida where rents actually decreased. In Cape Coral and North Port, rental prices dropped by -2.83% and -0.39% year over year, respectively. Other areas in Florida also saw tepid growth in rents, such as Orlando (0.90%), Palm Bay (1.25%), Jacksonville (1.29%), Deltona (1.30%), Tampa (2.09%), and Lakeland (2.18%).
The fact that rental prices in Florida are not growing at the same rate as the national average suggests a light at the end of the tunnel for the price crisis that has been affecting Floridians, especially those in the Miami metropolitan area. Real estate economist Ken H. Johnson, Ph.D., from FAU College of Business, stated that Florida may no longer be the epicenter of the nation’s rental crisis.
Despite the trend towards stabilization, the household income needed to pay for a typical rental unit remains high in Florida. In Miami, a household needs to earn at least $109,925 to avoid paying more than 30% of their income on rent. Even though rents have moderated across the state, Zillow reports that Miami continues to be the metropolitan area with the most expensive rents for its residents, with renters using 43% of the local median family income to rent housing.
Overall, the Northeast experienced some of the highest rent increases in the country, with cities like Syracuse, New York; Providence, Rhode Island; and New Haven, Connecticut experiencing annual rent increases above 8%. This is largely due to supply not keeping up with household formation, according to experts.
While the rental market in Florida is showing signs of stabilization, many renters are still making sacrifices to keep a roof over their heads until incomes increase.