Race to the Bottom: New Reports Show How Inflation Is Draining Miami Residents' Wallets

News flash: We're collectively going broke in South Florida just trying to make ends meet.

A November report by bill-pay company Doxo confirms what Miami residents likely sensed with a quick glance at their bank accounts. The report found that the cost of living in Miami is among the highest in the nation, with a typical household paying nearly $2,700 a month on ten common household expenses — 30 percent more than the national average of $2,046.

Miami residents are spending more than 53 percent of their income on the household cost categories tracked in the report. Only those living in Boston, Los Angeles, and Detroit spend a larger percentage of their income on monthly bills, according to Doxo's data on the 50 largest U.S. cities. The tracked expenses include rent, car insurance, mortgage payments, utilities, auto loans, health insurance, cellphones, cable and internet, alarm and security, and life insurance.

Inflation peaked during the summer of 2022, and consumer prices reached new heights, but for those living in South Florida, wages did not come close to keeping up. The Consumer Price Index for the Miami metro area has risen more than seven percent over the last 12 months, according to the U.S. Bureau of Labor Statistics.

The bureau recently reported that U.S. consumer price increases stabilized last month, renewing hope that inflation is slowing down and could eventually meet the Federal Reserve's target.

As for new homebuyers, Miami has retained its title as the least affordable residential market in the nation, according to RealtyHop's latest index. Factoring in the median list price, the estimated mortgage and property tax expenses for a newly purchased middle-of-the-road Miami home now exceeds $3,300, which represents more than 80 percent of the median income for a Miami household. (That doesn't include ballooning property insurance rates.)

Home prices in Los Angeles (the second least affordable housing market) and New York City (the fifth least affordable) are much more expensive than in Miami, but the costliness is offset by LA and the Big Apple's far higher median household income, so much so that buyers in those cities can expect to pay a smaller portion of their earnings on housing than Miamians do, according to RealtyHop.

Hialeah was ranked by RealtyHop as the fourth least affordable city in the nation largely as a result of low median income compared to other high-priced markets.

To wealthy new arrivals from New York and other U.S. cities where household income is relatively high, the South Florida real estate market might not look so expensive. The influx of high-earning newcomers willing to pay top-dollar for local homes in the post-pandemic market has played a role in Miami's property prices rising at a disproportionately high rate, according to a Business Insider report.

Apartment construction is booming in Miami, but many of the new units are priced in the high-end to luxury range, out of reach for financially struggling, longtime local residents.

"While the city's luxury housing options continue to appeal to wealthier homebuyers, middle-class residents are struggling to purchase property," RealtyHop wrote.

Among the nation's 50 largest cities, the Doxo report found that Miami had the ninth-highest monthly cost burden for residents.

Though it's been exacerbated by inflation and skyrocketing rent last year, Miami's housing affordability crisis is nothing new. Based on 2017 data, a past study by Florida International University found that among major metro markets nationwide, tenants in Miami had the least amount of earnings left after paying their housing expenses.

Some relief from the affordability crisis may be afoot, as rent in the Miami metro area appears to have plateaued year to date. Zumper reported that Miami's median list price for rental units has decreased slightly year over year, landing at a cool $ 2,600 a month for a one-bedroom apartment.

"We're seeing most major markets settle into their new resting heart rates. Miami, for example, is more expensive than pre-pandemic, but it's no longer seeing steep hikes month after month," Zumper CEO Anthemos Georgiades said.