By Gay Cororaton, MIAMI REALTORS® Chief Economist
Southeast Florida’s rental demand is likely to strengthen in 2025 as mortgage rates remain elevated and with the area continuing to see sustained migration from high-cost states and solid job growth.
MIAMI Realtors® expects the 30-year fixed mortgage rate to average 6.8% in 2025 as the Federal Reserve Board adopts a cautious approach to lowering the federal funds rate further to assess the effect of the Trump Administration’s economic agenda, such as higher tariffs on Mexico, Canada, and China on inflation and the economy.[1]
Affordability conditions will continue to drive the strong demand for rentals in 2025. In October 2024, the monthly mortgage payment, interest, and taxes (PITI) on a single-family home purchased at the median sales price with 10% downpayment was roughly $2,500 more relative to renting a single-family home in Miami-Dade, Broward, and Martin County. For multifamily dwellings, the monthly PITI on a condominium/townhome was about $700 more than the median asking rent on a multifamily rental.
MIAMI Realtors® estimates that given the average weekly wage of a worker in the Miami-Fort Lauderdale-West Palm Beach Metro area of $1,063, a 2-earner household can only afford a home priced at about $402,000. Based on October 2024 median sales prices, only 11% of Southeast Florida’s 944,000 renter households can afford the mortgage payment on a single-family home, assuming a 10% downpayment and a 25% mortgage payment to income ratio.
Sustained migration from states with higher rents and cost of living like New York and Florida will continue to drive housing demand in the rental or for-sale market. As of November 2024, the median multifamily asking rent is lower in the Miami Metro ($2,493) compared to the asking rents in the New York Metro ($3,271), Boston ($2,882), San Francisco ($2,808), or Los Angeles ($2,714). Asking rents continue to increase in metro areas such as New York Metro (+2.7%) , Boston Metro (+2.8%), and Los Angeles Metro (+1.8%) due to very low vacancy rates such as in New York Metro area (4.9%), Los Angeles (5.1%), Chicago (5.1%), and Boston (5.3%).
Rental demand will continue to be underpinned by solid job growth, with Miami-Dade County leading Southeast Florida’s job creation. In the second quarter of 2025, Miami-Dade County’s employment rose 1.5% compared to 0.8% nationally. Jobs rose in most sectors led by construction (+5.8%), manufacturing (2.6%), leisure and hospitality (2,4%), and financial activities (2.3%).[2]
Multifamily asking rents are likely to continue to grow at a modest pace in Miami-Dade County with about 25,0000 units under construction as of 2024 Q3, adding 19% to the total inventory.[3] New units are highly amenitized and due to affordability and income constraints among renters, those new units are not likely to cannibalize demand in the B/C apartments and drag rents down.
Multifamily asking rents rose on average by 3% in November following several months of decline in November 2024
Southeast Florida’s rental market remains a robust rental market, characterized by vacancy rates in Miami-Dade County (6.0%), Broward County (5.8%), and Palm Beach County (6.0%) that are lower than nationally (6.8%).
In Southeast Florida, the median asking rents on 2-bedroom multifamily units in Miami-Dade County rose on average by 3.2% in November 2024 from one year ago in Southeast Florida.
Palm Beach County experienced the highest rent growth at 13.5%, followed by Martin County at 12.4%. In Broward County and St. Lucie County, the median asking rents were unchanged from one year ago. In Miami-Dade County, the median asking rent fell 6.3%.
Single-family rentals made up a third of rental listings
Amid elevated mortgage rates that hover at over 6.5% and with sustained price appreciation in most counties, demand for single-family rentals is strong, In November, single-family rentals accounted for 37% of rental listings on the MIAMI/Rental Beast platform, from 21% in January 2019.
As of October 2024, the median single-family sales price rose in nearly all counties: Miami-Dade County ($670,750; +8.5%), Broward County ($615,000; +7.0%), Palm Beach County ($621,500; -0.2%), Martin County ($615,000; 7.5%), and St. Lucie County ($405,950; 2.0%).
Download the November 2024 Southeast Florida Rental Housing Report here.
[1] 2024-2025 Southeast Florida Housing Outlook: Modest Price Appreciation Amid Elevated Mortgage Rates – MIAMI REALTORS®
[2] US Census Bureau Quarterly Census of Employment and Wages
