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Inflation-stricken Florida Sees Some Relief With Rent Growth Cooling

Floridians finally appear to be getting some relief from relentless price increases, as shelter price growth moderates in the Sunshine State.

The inflation rate in Tampa fell by 1.5 percentage points in November from a year ago, by far the biggest drop among a dozen US metropolitan areas reporting inflation data on Tuesday. The annual rate of inflation in the central Florida city was 5.2% last month, about half what it was at its peak in mid-2022.

One major driver of the cooldown is housing. Shelter costs in Tampa rose 8% in November from a year earlier, the slowest growth in two years, according to non-seasonally adjusted Bureau of Labor Statistics data. In Miami, the 10.1% annual gain in shelter prices was slowest since June 2022.

BLS measures of rent inflation tend to lag data found in the marketplace. In the private market, measures of new lease and apartment rents in all major Florida markets, including Tampa, are flat or negative, said Jay Parsons, chief economist for rental industry software and analytics firm RealPage.

“Rents are cooling off fast,” Parsons said. “There’s no doubt that peak rent inflation is well in the rearview mirror.”

A wave of apartment construction is helping to cool rents in some of the US’s fastest-growing cities. Markets including Atlanta, Austin, and Phoenix each added at least 16,000 units over the past year, increasing their inventories by as much as 5.6%, according to RealPage data.

Overall, the inflation rate in Florida cities remains above average. In November, consumer prices were up 3.1% nationally from a year earlier, about a third of what the rate was at its peak in the middle of 2022. Tampa tied with Dallas and San Diego as the highest among metro areas that reported in November.

Read More: Yellen Sees Inflation Gradually Heading Back to Fed’s 2% Target

The federal government tracks prices in 23 metro areas, with most cities alternating every other month. Among the metro areas that reported inflation for October, Miami led the nation with a rate of 7.4%.

It will take more than a few months of slight moderation in rents to provide meaningful relief to many Floridians. Rents across property types rose by 43% in the Tampa area and by 51% in metro Miami between October 2020 and October 2023, according to the most recent observed rent index from housing marketplace Zillow. By comparison, rents across the US rose by 29%.

“Shelter is one those indexes many consider sticky and has been what’s keeping overall inflation in the Florida metro areas (Miami and Tampa) elevated,” Tim Ewing, a BLS economist in Atlanta, said by email.

Source: BNN Bloomberg