Tampa is making headlines again, and this time for home prices.
Tampa recorded the highest year-over-year home price increase of the nation’s 20 largest metro areas in May. While Florida posted the highest home price gain at 33.2% year-over-year.
Home prices across the country increased 20.2% in May 2022, compared to May 2021. Month-over-month prices increased by 1.8% compared to April 2022.
Last month, the annual appreciation of detached properties (20.9%) was 2.9 percentage points higher than attached properties (18%). We are seeing buyers move away from single-family homes and towards multi-family housing because it is slightly cheaper.
The homeownership rate in the U.S. has reached 1980s levels at 65%. As rising mortgage rates and affordability challenges are expected to cool buyer demand, annual U.S. home price gains are forecast to slow to 5% by May 2023.
“Slowing home price growth reflects the dampening consequence of higher mortgage rates on housing demand, which was the intention,” said CoreLogic’s Deputy Chief Economist Selma Hepp. “With monthly mortgage expenses up about 50% from only a few months ago, fewer buyers are now competing for continually limited inventory. And while annual home price growth still exceeds 20%, we expect to see a rapid deceleration in the rate of growth over the coming year. Nevertheless, the normalization of overheated buying conditions should bring about more of a balance between buyers and sellers and a healthier overall housing market.”
Rental prices are also rising, though higher in some cities than others. Tampa ranked No. 6 out of 10 of Florida’s top 10 markets for the most overvalued rental market.
“The Fed’s interest rate increase will price more people out of the housing market and keep them as renters – and as long as the demand for renting remains high, rental rates almost certainly will stay elevated as well,” said Associate Dean of FAU’s College of Business Ken H. Johnson, Ph.D.
To Tampa’s benefit, a previous report by RentCafe highlighted that the metro’s cost of living is lower than the national average. However, a new July rent report from ApartmentList shows the cost of living in Tampa continues to rise.
As Greater Tampa REALTORS® continues to track both local, state and national housing metrics and the factors that affect them, I encourage you to stay updated on local market statistics by watching GTR’s GTR’s Consulting Economist Elliot Eisenberg, Ph.D.’s latest housing market update here.