Regional Inflation Highly Influenced by Home & Rent Costs
New York, NY, April 24, 2023-"Tampa, Fla., residents face some of the hottest inflation in the country, but when excluding sizzling housing costs, price increases are nearly as cool as in Minneapolis,” reports the Wall Street Journal.
“The disparity shows regional inflation is heavily influenced by home prices and rent costs. The Tampa area has one of the highest inflation rates in the nation, 7.7% in March, according to the Labor Department. But when shelter costs are removed from the index, the Florida metro’s rate was 3.8%-putting it in line with the Minneapolis area, where inflation excluding housing was 3.6%.
“Rising housing costs and elevated inflation in growing, warm-weather metros such as Tampa, Phoenix and Atlanta reflect people migrating out of the Northeast and Midwest to the Sunbelt, said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University.
“‘People follow jobs and people follow opportunities and people follow weather,’ he said.
The Tampa metro area, which includes cities such as Clearwater and St. Petersburg, had overall inflation well above the national rate of 5% and the highest of any region the Labor Department measured in March. It trailed only Phoenix among places that the department regularly surveys. The largest Arizona metro registered a whopping 8.9% increase in prices in February over the prior year.
“By comparison, the Twin Cities area’s overall inflation rate was a more subdued 3.4% in March.
“The Labor Department produces a consumer-price index for 20 metropolitan areas every other month, while the three biggest-New York, Los Angeles and Chicago-are measured each month. Miami-area data is currently unavailable, the department said.
“Southbound migration in search of jobs, sunshine and less expensive housing isn’t new, but was turbocharged during the pandemic. That increased pressure on housing markets, pushing up rents and home prices. But when housing is removed from the index, inflation in those areas is near the national average.”