In Tampa, for example, March inflation was 7.7%. But after backing rental costs out of the local calculation, inflation was a somewhat-reasonable 3.8%.
TAMPA, Fla. – In some ways, the Americans moving to Florida bring inflation with them.
Regional inflation is heavily influenced by home prices and rent costs, as evidenced by the Tampa area, which 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%.
Increasing housing costs and rising inflation in growing, warm-weather metros reflect people migrating out of the Northeast and Midwest to the Sunbelt, says Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University.
“People follow jobs and people follow opportunities and people follow weather,” he says.
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.
Southbound migration in search of jobs, sunny weather and less expensive housing is not new, but it increased dramatically during the pandemic. That increased pressure on housing markets pushed up rents and home prices.
In most cases, however, inflation in high-growth areas is near the national average after housing data is removed from the calculation.
Source: Wall Street Journal (04/22/23) Gabriel, Rubin
© Copyright 2023 INFORMATION INC., Bethesda, MD (301) 215-4688