A new WalletHub report identified Miami and Tampa as persistent inflation hotspots in the U.S., driven by factors like high consumer demand, supply chain disruptions, competitive real estate markets
Miami and Tampa are maintaining their statuses as inflation hotspots in the United States, according to a new WalletHub report.
Miami-Fort Lauderdale-West Palm Beach ranks second among major U.S. Metropolitan Statistical Areas (MSAs) in terms of year-over-year Consumer Price Index (CPI) increase, recording a 5.70 percent surge and behind only the Dallas-Fort Worth-Arlington metro area. Tampa-St. Petersburg-Clearwater is not far behind, ranking sixth with a 5.20 percent CPI increase.
Though inflation rates have begun to decline nationally— down from a peak of 9.1 percent in June 2022 to 3.4 percent last month — additional data from the Federal Reserve Bank of St. Louis find that the Tampa-St. Petersburg metro area experienced a 7.7 percent inflation rate over the past year, while the Miami-Fort Lauderdale metro area saw a 7.1 percent rate in the same metric.
“Multiple distinct factors, each capable of driving up prices on their own, have converged in the wake of the pandemic, creating an ideal environment for inflation,” said Johns Hopkins Associate Professor of Practice Christina DePasquale. “There is a noticeable surge in consumer demand for goods and services which has further contributed to rising prices.”
The elevated inflation rates in Miami and Tampa stem from an array of causes such as global supply chain disruptions and unique local economic conditions. Competitive real estate markets in the cities also play a factor, where escalating housing prices, fueled by intense demand and limited supply, have substantially influenced the overall cost of living.
Last month, Miami-Dade County was noted as 2023’s hottest rental market in America. For those seeking new housing, each available rental unit in Miami attracted an average of 22 applicants.
In November 2023, the rental market in Miami saw the average rent reach $3,280, placing it among the costliest metro regions in the country. Although there was a 3.7 percent increase in Miami-Dade’s housing supply this year, it did not significantly alleviate the high demand for units or facilitate downward rental cost trends.
Population growth has also been one of the largest contributors to inflation in The Sunshine State. Housing costs are up significantly, particularly in the Miami-Fort Lauderdale-West Palm Beach area, where prices have jumped 12.5 percent since August 2022. Housing costs make up approximately 40 percent of the Consumer Price Index’s calculation.
A previous report from WalletHub from July 2023 showed that Tampa-St. Petersburg-Clearwater led the country in inflation rates. Miami-Fort Lauderdale-West Palm Beach ranked 8th on that report. A month ago, Phoenix topped both Miami and Tampa but has now slipped to 20th in the nation.