Oct 24, 2022 - Real Estate

Tampa Bay housing market nears boil-over

Cities with the biggest increase in the typical monthly mortgage payment
Data: Zillow; Chart: Nicki Camberg/Axios

Buying an affordable home is getting closer to impossible in Florida, especially in Tampa Bay.

Driving the news: Florida has nine of the top 10 fastest-growing monthly mortgage payments, according to Zillow — with Tampa Bay dominating that list.

Why it matters: Buyers are already being priced out of the market, and those holding out for prices to improve likely have a long wait ahead of them.

By the numbers: Tampa homebuyers are spending 35.5% of their household income on average on mortgage payments, according to a new Zillow analysis. That's well above the 22.7% homeowners spent in the area on average between 2005 and 2021.

  • The national average is 30%, which is also the threshold at which buyers are considered "cost burdened" by housing costs, Zillow notes.

The big picture: Tampa Bay's home values are about 36% above where they would need to be for mortgage affordability to return to its historic norm over the last 16 years, according to Zillow.

  • Nationally, the home value rate is almost 25% above what it would need to be for affordability to return to those pre-2022 levels.
  • Zillow says it is extremely unlikely home values will fall back to their historical affordability norms without a sharp inventory increase, which is not expected.

What they're saying: With low inventory, dismal income growth and ever-rising mortgage rates, Zillow senior economist Nicole Bachaud said the next several years will be a major challenge for home buyers.

  • "There is plenty of pent-up demand ready to bid prices back up if they reach a level would-be buyers can once again afford," Bachaud warned.

What to watch: "The recent slowdown in single-family construction is not a good sign that the market is getting closer to building enough to meet demand," Bachaud said.


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