Study: Slight Rent Increase in Florida as Northeast Sees Larger Growth

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After years of astronomical rent growth, Florida rents are finally settling down compared to the national average, according to researchers at Florida Atlantic University and two other schools.

By amber bonefont | 5/6/2024

After years of astronomical rent growth, Florida rents are finally settling down compared to the national average, according to researchers at Florida Atlantic University and two other schools.

While national rents increased 3.57% annually, all measured metropolitan areas in Florida saw tepid rent growth below that amount, according to end of March data from the Waller, Weeks and Johnson Rental Index.

Rents in Cape Coral and North Port declined year-over-year by 2.83% and .39%, respectively. In Orlando, rents only increased by .90%; Palm Bay, 1.25%; Jacksonville, 1.29%; Deltona, 1.30 %; Tampa, 2.09%; Lakeland, 2.18%; and Miami, 2.76%.

“For the most part, the measured metros in Florida are getting back in shape in terms of annual rental increases and slowly returning to their historic pricing trends. Rent growth is significantly below the national average, suggesting that Florida may no longer be the epicenter of the nation’s rent crisis,” said Ken H. Johnson, Ph.D., real estate economist in FAU’s College of Business. “Renters are, however, paying small premiums in the state’s varying markets, but the premiums have shrunk noticeably each month over the last year or so.”

The Waller, Weeks and Johnson Rental Index measures rent growth in the 100 most populated metropolitan areas across the county. Johnson and fellow researchers Shelton Weeks, Ph.D., of Florida Gulf Coast University, and Bennie Waller, Ph.D., of the University of Alabama, examine how much of a premium or discount renters are paying for the typical unit in an area based on historical pricing trends. The index, released as part of FAU’s Real Estate Initiative, also tracks average yearly increases, monthly increases, and income the typical household needs to make to devote no more than 30% of income toward rents.

Overall, the Northeast saw some of the highest rental increases in the country. Rents increased 8.79% annually in Syracuse, New York; Providence, Rhode Island, 8.16%; New Haven, Connecticut, 8.06%; Worcester, Massachusetts, 7.35%; Springfield, Massachusetts, 7.25%; and Rochester, New York, 6.64%.

“We are seeing some of the largest rental increases in the Northeast, largely due to supply not being built fast enough to keep up with household formation,” Waller said. “While populations may be waning slightly in parts of the country, household formation has not slowed anywhere. This highlights the need to stay abreast of the demand for rental units around the country as it can be easy to fall behind.”

Other markets in the country that also saw large increases were Dayton, Ohio, 7.48%; Akron, Ohio, 7.17%; Madison, Wisconsin, 6.89%; and Louisville, Kentucky, 6.86%.

For Floridians, the needed household income to afford the typical rental unit remains high. In Miami, a household needs to make at least $109,925 to avoid paying more than 30% of their income toward rent. It’s followed by North Port, $96,767; Cape Coral, $87,348; Tampa, $83,960; Orlando, $80,953; Palm Bay, $80,824; Lakeland, $76,402; Deltona, $76,090; and Jacksonville, $69,229.

“The typical income needed to afford a unit in Florida has started to moderate, giving renters very slight breathing room,” Weeks said. “Though rents have moderated across the state, many renters will continue to make sacrifices to keep roofs over their heads until incomes rise.”

-FAU-

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