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Trigaux: Home appreciation varies widely, fueling wealth disparity, says Harvard report

Tampa Bay renters typically spend 50 percent of their income on housing. That high level dollar commitment to cover housing is widespread among renters living in Florida's major metro areas. [Handout photo]
Tampa Bay renters typically spend 50 percent of their income on housing. That high level dollar commitment to cover housing is widespread among renters living in Florida's major metro areas. [Handout photo]
Published Jun. 19, 2017

A nationwide look at housing finds the United States increasingly split between the have-mores (those with fast appreciating home values) and the have-less (those with flat or declining home values). It's a troubling trend that raises questions for Tampa Bay and Florida's dependence on newcomers and retirees to keep fueling the state's hot economy.

People migrating from states and metro areas in rising housing markets, typically along the east coast, will bring that enhanced nest egg of home equity with them when they head to the Sunshine State. Others, especially those from the Midwest where home prices have grown the least or even stalled, may find their new start or planned retiree life in Florida to be more expensive than they anticipated.

New arrivals who rent will find sticker shock in any of Florida's major metro areas. The Tampa Bay and Orlando areas in general, and the Miami area all the more, have become high-priced rental markets with the cost of rent averaging 50 percent or more of the typical renter's income. Historically, housing costs topping 30 percent was considered high priced.

Previous Coverage: Tampa Bay home prices still soaring amid tight supply

Those are just some of the findings in the recently released State of the Nation's Housing, an annual report published by Harvard University's Joint Center For Housing Studies.

The widening gap between hot and cold housing markets in the country is striking. In the 10 most expensive U.S. metropolitan areas, for example, median home values have increased by 63 percent since 2000, after adjusting for inflation. In the 10 cheapest metros, median values rose by just 3.6 percent. That's a stunning disparity of wealth being created.

Minorities also have suffered in the housing market. While the rate of homeownership for whites rose to 71.9 percent over the past 12 years, the black-white homeownership gap widened by 2.3 percentage points to 29.7 percentage points in 2016. That's the largest gap since World War II.

State of the Nation's Housing offers plenty of insights. Here are three takeaways to consider as we watch home prices and tight housing inventories combine to make it more expensive to find an affordable roof to place above one's head.

1. U.S. house prices rose 5.6 percent in 2016, finally surpassing the high reached nearly a decade earlier. Achieving this milestone reduced the number of homeowners underwater on their mortgages to 3.2 million by year's end — "a remarkable drop," the report states — from the 12.1 million peak in 2011.

2. The not-so-good news? In inflation-adjusted terms, national home prices remained nearly 15 percent below their previous high. As a result, typical homeowners — including those in Tampa Bay —have yet to fully regain the housing wealth lost in the downturn.

3. Despite the economic rebound, nearly 39 million U.S. households live in housing they cannot afford. The shrinking supply of low-cost rentals, along with potential losses of subsidized units and declines in the value of tax credits, the annual report says, could widen the already substantial gap between the demand for and supply of affordable housing.

Contact Robert Trigaux at rtrigaux@tampabay.com. Follow @venturetampabay.