Phoenix may be a lovely place to visit—botanical gardens, good sporting environment for golf, tennis and pickleball, museums galore, good food and drink, access to national parks, and among the country’s sunniest metropolitan areas. But to live?
Before residents unpack their bags and settle in, they may want to know that median rent payment there grew by a whopping 26% year over year YoY this past February on a six-month moving average basis, compared with 2.5% in San Francisco, 8% in Boston and 7% in Seattle, all considered expensive cities to live, according to Bank of America.
Mortgage payments show a similar regional divide in many locations, though not in Phoenix and SF where both experienced the same hikes of 10%. Seattle was at a slightly higher 12%, according to Bank of America internal data.
While enthusiasm for home sales has lessened from last year due to rising borrowing costs, shelter costs keep increasing, according to more BOA data. Median rent payments were up more than 8% YoY and mean mortgage payments were up 7%.
Other cities also in the Sun Belt, saw similar record highs, even if not as much as Phoenix. Tampa’s rent payments rose 23% YoY; Charlotte’s and Austin’s climbed 21% and Miami 16%. Many locations such as Orlando, Miami, Atlanta and Charlotte also saw significant rises in mortgage payments—up respectively 13%, 15%, 14% and 10%. Moreover, they show no signs of letting up.
There are several reasons driving these dynamics, the Bank of America says.
Increased migration to such areas is one factor, due in part to affordability. Locations with lower rent increases show population declines, according to BOA data.
More affordable housing is another reason since it attracts residents and homeowners and increases demand. Why not live and work from a residence in a temperate zone than a cold location such as Chicago where rents and mortgage costs both went up only 7%.
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