Sun Belt cities, located in the Southeast and Southwest regions of the United States, have seen some of the largest influxes of new residents during the pandemic. But now they have one of the worst inflations in the country, according to a new study.
With an impressive inflation rate of 8.3% in August, every American had to deal with the rising cost of goods and services. But inflation can vary from region to region depending on a range of factors, including the availability of goods and services, as well as transportation and housing costs.
Residents of Sun Belt are experiencing above-average inflation rates, nearing double digits, according to consumer price index (CPI) data. Cities in this region also happen to have seen some of the largest individual increases in inflation over the past year.
Using CPI data, personal finance site WalletHub looked at 23 of the largest US metropolitan areas and rated them out of 100, with 100 being the highest rate of inflation.
Here are the 10 cities with the worst inflation:
- Phoenix-Mesa-Scottsdale, Arizona: 92.11
- Atlanta-Sandy Springs-Roswell, Georgia: 87.59
- Tampa-St. Petersburg-Clearwater, Florida: 84.16
- Miami-Fort Lauderdale-West Palm Beach, Florida: 72.84
- Dallas-Fort Worth-Arlington, TX: 69.2
- Riverside-San Bernardino-Ontario, California: 68.71
- Denver-Aurora-Lakewood, Colorado: 67.12
- Baltimore-Columbia-Towson, Maryland: 66.79
- Minneapolis-St. Paul-Bloomington, Minnesota-Wisconsin: 62.74
- Houston-The Woodlands-Sugar Land, TX: 61.99
The six major metropolitan areas with the highest inflation are located in the Sun Belt.
In last place is Anchorage, Alaska, followed by the San Francisco Bay Area and New York. Even before the pandemic, these cities already had a high cost of living, which could explain the relatively marginal increases in inflation.
Many of the top-ranked cities in the study were migration hotspots at the start of the pandemic, when people migrated from the Northeast and parts of California for cheaper properties elsewhere in the country, mostly in the Sunbelt.
But with a large influx of new residents, these cheaper real estate markets aren’t as affordable as they used to be.
Even though the housing market has cooled somewhat due to rising mortgage rates, all of the top ranked urban areas in the study experienced house price inflation of 15% to 30% during the last year in August, according to data from online brokerage Redfin.
WalletHub rankings are based on CPI data for all goods and services. Notably, shelter costs make up 32% of the overall consumer price index — by far the largest share. The study’s score is calculated using equally weighted comparisons of house price growth year on year, as well as two months ago, using CPI data.
Register now: Be smarter about your money and your career with our weekly newsletter
Don’t miss: Will canceling student loans make inflation worse? Here’s what economists say