Florida's Hot Rental Market Leads to Highest Share of Cost-Burdened Renters
Apartment asking rents are rising at a double-digit place in 35% of 390 metro areas, NAR reported.
Demand when measured by 12-month absorption has outpaced supply (12-month deliveries) in Florida’s main metro areas, which means the Sunshine State’s rent growth is likely to increase at a pace faster than the national rate.
This high rent growth and high demand relative to supply makes Florida the state with the highest share of renters that are cost-burdened, according to the National Association of Realtors. The combination of high rent growth and rising inflation is expected to further strain renter households as the cost of utilities rises.
According to NAR, Florida includes several metros experiencing rent growth of at least 20%, such as Naples (38%), Fort Myers (32%), Palm Beach (27%), Orlando (24%), Tampa (23%), Fort Lauderdale (23%), Port St. Lucie (22%), and Punta Gorda (20%).
In Orlando, there were 4,815 more units that were absorbed compared to the number of units that were delivered into the market in the past 12 months; followed by Miami, at 3,647 units; and Fort Lauderdale, at 2,800 units.
Asking Rents Up 11% Year Over Year
Apartment asking rents are rising at a double-digit place in 35% of 390 metro areas, according to NAR’s analysis of asking rent data in those areas.
Nationally, asking rents are up 11% year-over-year. Most of these double-digit rent increases are occurring in the Sunbelt and Mountain states, with Florida rising as the hottest commercial market.
In 2020, 53.2% of renter households spent more than 30% of their income on rent, or are considered cost-burdened. Hawaii and California are the next states with the highest share of cost-burdened renters, at 51.9% and 50.5%, respectively.
Orlando Tops Marcus & Millichap’s List
Orlando and Las Vegas claim the top spots in Marcus & Millichap’s 2022 US Multifamily Index by ranking at the top nationwide in job creation and household formation, which in turn are fostering outsized jumps in effective rent. Florida dominates the top 10 with Fort Lauderdale (No. 3), West Palm Beach (No. 4) and Tampa (No. 8).