The cost of purchasing a home has been on the rise across the United States, often making local headlines and even national news stories. But, what some Bay area residents don’t realize is that in Tampa, the cost of purchasing a home is significantly more affordable than renting.
Trulia recently found that of the most popular housing options for Americans age 25 to 34, renting costs on average 42 percent more than buying a home in the Tampa metro area. The same difference can be observed in six other large metro areas— Houston, Baton Rouge, Syracuse, Fort Lauderdale, Miami, and New Orleans.
While the cost of housing has continued to rise, many Americans are unaware that dishing out rent on a monthly basis is actually costing them much more than purchasing a home would. Nationwide, buying costs Americans an average 23 percent less than renting does. These significant price differentials are motivating millennials to purchase homes, instead of renting, in all but a few notoriously high-priced areas, like San Francisco, New York City, and Honolulu.
For Tampa-based millennials, the choice to buy is, economically speaking, the smartest housing option. Of course, the fact remains that some millennialls aren’t financially positioned to buy, or that they don’t plan to stay in Tampa for an extended period of time, making buying an unwise decision.
In the past, Americans in their late twenties and early thirties have tended to rent rather than buy, especially in large metro areas, for a number of valid reasons. Perhaps the largest determent is the volatility of home values around the country. Today’s Americans in this age group remember all too well the recession and housing crisis of the early 2000s, and renting seems an obvious way to avoid major unpredicted financial hardship should the past repeat itself.
In Florida specifically, millennials may be wary of buying because of weak wages, tougher mortgage standards, and high cost of rental areas, especially when the nationwide public mentality is that renting is the more affordable option and buying is an investment for the future. Two of Florida’s Gulf Coast Metro areas rank in the top three American cities for fast-rising rental increases—Fort Myers and Sarasota.
According to a recent RentRange study, Fort Myers single-family home rental prices rose faster than in any other major city in the U.S. over the past year. In Sarasota, rental prices increased about 17 percent in the last year. Tampa, just a short drive up the Gulf Coast presents much more affordable housing options for millennials.
In time, the cost disparities between renting in buying will become less pronounced, but buying is predicted to remain the more affordable option for young people, especially in the Bay area. For more information regarding home ownership, [Click Here].