Florida is enduring the highest inflation in the nation, recently released data shows, as stubbornly high housing costs continue to affect consumer prices across the region.
Two metropolitan areas, Miami and Tampa, were in the top three of a list of 23 regions analyzed in a report on inflation from the Bureau of Labor Statistics.
The Consumer Price Index in the area encompassing Miami, Fort Lauderdale and West Palm Beach increased 9 percent, year-over-year.
Phoenix was in second place, with the CPI at 7.4 percent.
In third place was the Tampa metropolitan area, with a CPI of 7.3 percent.
He Bureau of Labor Statistics analyzed a range of price increases for April and May to present its new findings. Nationwide, the CPI rose 4 percent, making Miami’s rate more than double the national average.
Median home price in Miami increased from $345,000 in March 2020 to $560,000 in May 2023
Florida continues to experience an increase in the number of people moving into the state, contributing to two of its cities having the highest and third highest Consumer Price Index in the country.
The lowest inflation rate among the 23 metropolitan areas was felt in Minneapolis-St Paul, at 1.8 percent, followed by Hawaii at 2 percent.
Florida’s rise was largely due to housing costs, analysts said.
“A lot of people keep coming to Florida because the economy is really strong and a lot of people like the fact that we don’t have an income tax like in New York, for example,” said Amanda Phalin, an economist at the University of Florida.
“And in places like Miami, we’re seeing a lot of demand for real estate from non-Florida or non-American investors, usually wealthy people who want to have a nice home here.”
Florida’s population grew more than any state between July 2021 and July 2022 due to internal migration, according to the latest estimates from the Census Bureau.
The Sunshine State has seen an increase in population in recent years, along with an increase in wealth, as people flee the Northeast and West Coast and their high crime rates and invasive governments from southern states.
Florida also had the fastest population growth by percentage during the same time period, the first time it has reached that top spot since 1957.
Ron DeSantis, Florida’s governor and Republican presidential candidate, has used his state’s lure as a campaign tool, vowing to take his boom-city policies and pro-business approach to America.
The increase in population has pushed up the prices of transportation and services.
In addition, rising mortgage rates, limited housing stock in cities like Miami, and more expensive homeowners insurance have contributed to high inflation.
Insurance premiums have also skyrocketed in the Sunshine State, as a series of devastating natural disasters coupled with high fraud rates have seen homeowners insurance bills average $6,000, nearly four times the US average. .us
“Both the rental and purchase markets are experiencing upward price pressures due to all of these factors,” Phalin said, talking to CNN.
He added: “Many houses are becoming Airbnbs and some homeowners associations prohibit people from renting out their houses.”
Florida’s population grew more than any other state between July 2021 and July 2022 due to internal migration
A chart of year-over-year increases in Florida home prices shows that the increases stalled in April 2023. It’s the first time since 2011 that there hasn’t been a year-over-year increase.
Economists pointed to Atlanta as an example of the possible trajectory for Miami and Tampa.
As of August 2022, Atlanta topped the list, with a CPI of 11.7%.
However, the most recent data shows the CPI falling to 5.8 percent today.
Atlanta’s inflation spiked as people moved away from expensive regions and flocked to the bustling Georgia city.
It has been reduced in part as more housing became available.
“If you look at the data, the housing inventory in Atlanta has gone up quite a bit from a year ago, so there’s a lot more supply on the market, while the number of sales has gone down,” said Kaiji Chen, an economics professor at University of Emory in Atlanta.
He said a reduction in transportation costs has also helped.
Miami has maintained its place as the least affordable metropolitan area in the United States, despite a drop in Florida property prices, and billionaire Peter Thiel says the state is now too expensive to move his operations from Silicon Valley.
The median cost of a home in Miami was $585,000 in May, according to RealtyHop, which ranked it No. 1 on a list of the least affordable housing markets in America.
A typical homeowner can expect to spend 79.92 percent of their monthly income on the property, according to the study, which placed Los Angeles, California, second and Newark, New Jersey, third.
Republican investor and donor Peter Thiel recently said that Miami housing prices made him reluctant to move his operations to Florida.