Apartment asking rents are rising at a double-digit pace in 35% of 390 metro areas, according to NAR’s analysis of asking rent data in those areas.1 Nationally, asking rents are up 11% year-over-year. Most of these double-digit rent increases are occurring in the Sunbelt and Mountain states, with Florida rising as the hottest commercial market.
Florida’s market remains hot, with several metros experiencing rent growth of at least 20%, such as Naples (38%), Fort Myers (32%), Palm Beach (27%), Orlando (24%), Tampa (23%), Fort Lauderdale (23%), Port St. Lucie (22%), and Punta Gorda (20%).
Demand (measured by 12-month absorption) has outpaced supply (12-month deliveries) in Florida’s main metro areas, so Florida’s rent growth is likely to increase at a pace faster than the national rate. In Orlando, there were 4,815 more units that were absorbed compared to the number of units that were delivered into the market in the past 12 months, followed by Miami, at 3,647 units, and Fort Lauderdale, at 2,800 units.
This high rent growth and high demand relative to supply makes Florida the state with the highest share of renters that are cost-burdened. In 2020, 53.2% of renter households spent more than 30% of their income on rent, or are considered cost-burdened. Hawaii and California are the next states with highest share of cost-burdened renters, at 51.9% and 50.5%, respectively. The combination of high rent growth and rising inflation is expected to further strain renter households as cost of utilities rises.
1 Source of data: CoStar