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Renters in Tampa Bay pay much higher percentage of incomes for housing than homeowners

Rents in the Tampa Bay area are eating up a bigger chunk of personal income, making it harder for people to save for a down payment — at time when homes otherwise are affordable by historical standards.

A new study by Zillow found that bay area renters paid an average of 32.4 percent of their monthly income on rent in the three months ended in June. That was up from 26.8 percent in the years 1985-2000.

In the same quarter, homeowners spent just 14.6 percent of their income on mortgage payments, down from the historical average of 19 percent.

Nationally, too, rents are soaring while mortgages remain affordable.

"There are good reasons to rent temporarily — when you move to a new city, for example — but from an affordability perspective, rents are crazy right now," said Svenja Gudell, Zillow's chief economist.

"Our research found that unaffordable rents are making it hard for people to save for a down payment and retirement, and that people whose rent is unaffordable are more likely to skip out on their own health care."

As a result of the foreclosure crisis, thousands of Tampa Bay residents lost their homes and have been forced to rent. The area has seen a recent explosion in apartment construction, especially in the luxury end of the market

Rents at Modera Prime 235, a new apartment building in downtown St. Petersburg, range from $1,195 to nearly $2,500 for a two-bedroom unit. At the Modera Westshore in Tampa, tenants can pay up to $2,247 for a three-bedroom unit.

At a time when interest rates are still low, that $2,247 would be more than enough to cover the monthly mortgage payments on a $350,000 house — assuming the buyer could scrape up the $17,500 needed for a 5 percent down payment.

Bonnie Davis, managing broker for ReMax Metro in St. Petersburg, agrees that Tampa Bay rents are "crazy," not just for multifamily housing but also for single-family homes.

She was surprised when a 1,700-square-foot house in St. Petersburg's Old Northeast recently rented for $2,500.

"It did have a pool but had not been significantly updated with any quality, and I thought there was no way (they'd) get $2,000 for that," Davis said. "That house rented in like a day."

She thinks, though, that Zillow might be overstating the impact that high rents have on the ability to afford down payments. She notes that first-time home buyers and even some buyers who previously owned a home can qualify for FHA loans with as little as 3.5 percent down.

"By the time you scrape together the security deposit and first and last month's rent (for an apartment), you're almost there" with a down payment, Davis said.

As a percentage of income, rents in the Tampa Bay area in the second quarter exceeded the national average of 30.2 percent — the highest percentage ever nationally, Zillow says.

Bay area buyers, though, spent slightly less of their income than renters in Orlando and much less than those in South Florida. Zillow deems Miami, New York City, Los Angeles, San Diego, San Jose, Calif., and San Francisco as "unaffordable" because rents there exceed 40 percent of monthly income.

Even if interest rates rise as expected this fall, homes in most U.S. metro areas would remain affordable by comparison, Zillow says. With a 6 percent mortgage, a bay area homeowner would spend just 18.9 percent of his or her income on monthly payments.

Contact Susan Taylor Martin at smartin@tampabay.com or (727) 893-8642. Follow @susanskate.

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