“The Fed’s interest rate increase will price more people out of the housing market and keep them as renters – and as long as the demand for renting remains high, rental rates almost certainly will stay elevated as well," said Ken H. Johnson, an economist at FAU's College of Business.
Florida recorded six of the top 10 overvalued rental markets in the country during the month of May, with Tampa clocking in at No. 5 at a 17.2% overvalue price. Metro Miami ranked No. 1 at 22.70% and Fort Myers ranked No. 2 at 20.41%.
Based on historical trends and traditional rate increases, Tampa's average rental price should be around $1,777 per month, but instead costs $2,089 due to excessive demand, according to the FAU report.
Along with record-high demand, Tampa currently ranks No. 12 on the most competitive rental market in the nation due to high renewal rates and limited apartment availability, according to RentCafe.
Researchers suggest that creating a healthier supply-demand balance is key to moderate rental prices, meaning that the city needs to continue to build more housing. This process doesn't happen overnight and comes with a price tag, but may be the next step in aiding renters living paycheck to paycheck.
Despite a public outcry for rent control, Tampa Mayor Jane Castor says such policies would "kill development" and instead has set up plans to allocate $5 million in relief to private rental landlords and created a housing crisis hotline.