BofA Data Finds the Surge in Housing Costs Varies by Metropolitan Area, with the Sun Belt Significantly Outpacing the West and Northeast

Median Rent Payment Growth in Sun Belt Cities, such as Phoenix and Tampa, Outpaced Western and Northeastern Cities by more than 20 percentage points

NEW YORK, March 27, 2023 /PRNewswire/ -- Bank of America Institute released new analysis today which examines the increase in housing costs across the United States. BofA internal data shows that median rent payments were up 8% year-over-year (YoY) and median mortgage payments were up 7% YoY for BofA customers in February, but there are meaningful variations by geography. Metropolitan areas in the Sun Belt like Phoenix and Tampa saw rent costs increase by as much as a staggering 26% and 23% YoY respectively, both of which are at a record high pace despite the Fed action aimed at taming price increases. Cities outside of the Sun Belt, like San Francisco, saw more muted growth, as low as 2.5% YoY. Mortgage payments saw a similar regional divide, with metropolitan areas like Tampa, Orlando and Atlanta seeing the biggest rise, while Chicago, Washington, D.C. and Boston see only modest gains.

Economists at the Institute offer four possible reasons for the regional divide:

1. Domestic migration trends between states since the beginning of the pandemic saw people moving to Arizona, Florida and Texas, while leaving California and Illinois
2. Sun Belt markets offer more affordable housing, even after the surge in home prices and rents
3. Job creation in the Sun Belt markets outpaced other markets and exceeded the national average since the start of the pandemic
4. The creation of higher-paid jobs such as those in technology and finance, which saw higher growth in the Sun Belt, puts upward pressure on the local housing market

"People across the Unites States continue to feel the squeeze from higher housing costs but the impact is uneven between regions," said Anna Zhou, economist for Bank of America Institute. "Ultimately, population and employment growth are two main factors driving a region's housing market, and this may be why we are seeing an over 20% YoY increase in rents in many Sun Belt cities."

Read the full analysis and methodology

About Bank of America Institute

Bank of America Institute is dedicated to uncovering powerful insights that move business and society forward. Established in 2022, the Institute is a think tank that draws on data and analyses from across the bank and the world to provide timely and original perspectives on the economy, Environmental, Social and Governance (ESG), and global transformation. The Institute leverages the depth and breadth of the bank's proprietary data, from 67 million consumer and small business clients, 56 million verified digital users, $4.2T in total payments in 2022 and $1.4T in consumer and wealth management deposits. From this robust data set, the Institute provides a unique perspective on the health of the economy. It also elevates thought leadership from throughout the bank that addresses long-term trends and shares these findings with the general public.

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SOURCE Bank of America Corporation