Sarasota region ranks among the lowest rent-cost-to-ownership ratios in Florida

While Sarasota city and county governments continue working to address affordable and attainable housing, new residents continue to arrive post-pandemic as housing supply lags demand, maintaining upward pressure on pricing for buyers and renters alike.

As new buyers flooded the market mid-pandemic, supply chain and workforce disruptions slowed new construction, pushing prospective homeowners into the rental market and prompting a spike in rents for both apartments and single-family homes.

A new study by Roofstock examined metropolitan statistical areas that have the highest rent-to-price ratios, one metric that potential buyers use to assess if continuing to rent is more viable than trying purchase a home in their area. With both real estate and rental prices rising quickly over the last two years, renters are left to try to stretch their budgets to purchase homes that rapidly increased in price, or to live with rising rents and risk home values climbing further out of reach.

In markets where the ratio of rents to the cost of home ownership are higher, purchasing is a better option, whereas those with lower rent-to-price ratios, where costs of homeownership exceeds rent, homes may be overvalued.

According to the data, rent remains a lower-cost option to purchasing a home in the local market at this time.

As challenging as rents are in the North Port-Sarasota-Bradenton MSA, at 68th among the country’s mid-size MSAs it ranks among the lowest rent-to-price ratios among its Florida counterparts. With a median rent of $1,588 and an average monthly mortgage payment of $2,211 for a median home price of $502,186, the rent-to-price ratio is 3.79%, well behind the 5.16% ratio of Ocala, which ranks No. 32 nationally and the most advantageous home purchase value in the state compared to rent.

That compares to a national average ratio of 4.8% with a median rent of $1,435 and a mortgage payment of $1,567 for a median home price of $355,852. Other Florida ranked mid-size Florida MSAs are Pensacola-Ferry Pass-Brent at No. 34 in the country, Lakeland-Winter Haven at No. 37, Palm Bay-Melbourne-Titusville at No. 41, Port St. Lucie at No. 47, Deltona-Daytona Beach-Ormond Beach at No. 49, and Cape Coral-Fort Myers at No. 62.

The only mid-size Florida market where it costs more to own than to rent than it does here is Naples-Immokalee-Marco Island, which ranks No. 76 in the nation.

To find the locations with the highest rent-to-price ratios, Roofstock used data from the Department of Housing and Urban Development, Zillow and the U.S. Census Bureau. The rent-to-price ratio was calculated as the ratio of annualized median rent from HUD to Zillow’s current Home Value Index. For additional context, the monthly mortgage payment for a median-price home was calculated assuming a 30-year fixed mortgage, 20% down payment, and an interest rate at 5.22%.