By Gay Cororaton, MIAMI REALTORS Chief Economist
Key Takeaways
- Mortgage rates could fall to 6.3% by year-end amid rising economic risks.
- Single-family home sales will modestly increase in 2025 with high-income buyers driving growth.
- Single-family home prices will continue to appreciate at below 5% with inventory hovering at 6 months’ supply.
Access the 2025-2026 Southeast Florida Housing Outlook (March 2025 Update) HERE.
Mortgage rates could fall to 6.3% by year-end amid rising economic risks.
MIAMI Realtors® expects the 30-year mortgage rate to decline to 6.3% by year-end, with a full-year average of 6.4%, according to its 2025-2026 Southeast Florida Housing Outlook (March 2025 Update).
As of the week of April 3, the 30-year mortgage rate had moved down to 6.64%, from this year’s peak of 7.04% in mid-January. Mortgage rates have fallen following the decline in the 10-year Treasury note to 4% as of April 4 from a peak of 4.8% in January. Investors have pushed down yields, increasingly becoming worried about the adverse effects on growth and inflation of recently imposed tariffs and an increasing global trade war.
On April 3, President Trump imposed a universal tariff of at least 10% on all US imports with higher tariffs on imports from about 60 countries such as China (34%), the European Union (20%), South Korea (25%), Japan (24%), Vietnam (46%), and India (26%).
Amid an escalating trade war, MIAMI Realtors® forecasts inflation to average 3.6% in 2025, with inflation possibly hitting 4.5% by year-end.
Single-family sales will modestly increase in 2025 with high-income buyers driving growth.
With mortgage rates declining slightly in 2025, MIAMI Realtors® projects single-family sales to increase moderately by 1%, a reversal from the 1.8% decline in 2024. The uptick in sales will be modest as homebuyers also grapple with higher inflation and rising economic risks (e.g., unemployment, erosion in financial wealth) that could lead them to postpone home purchases.
Reduced global trade and tighter immigration policy could slow foreign buyer home purchases (condominiums and townhomes) that account for 10% of Southeast Florida home sales.
High-income buyers will continue to drive market growth due to challenging affordability conditions and little inventory of homes below $400,000 that a 2-earner household earning average wage could afford.
In Miami-Dade County, single-family homes $400,000 and below made up just 2% of active inventory as of the end of February while million-dollar homes made up 42% of active inventory. Single-family homes below $400,000 accounted for about 10% of the total inventory in Broward, Palm Beach, and Martin counties.
Affordability remains a major constraint to homebuying, with only 14% of renter households able to afford a single-family home or condominium/townhome. In 2025, the household income needed to afford a single-family home in Southeast Florida’s counties is $168,000 while the household income of a 2-earner household each earning the average weekly wage is about $115,000.
As economic growth slows and the stock market weakens, higher-income individuals who view home ownership as part of a wealth allocation strategy could shift some of their financial wealth to real estate, bolstering sales in the upper price tier markets like Miami Beach, Coral Gables, Lighthouse Point, Palm Beach, and Jupiter.
Single-family median sales prices will continue to appreciate at a modest pace below 5%.
MIAMI Realtors® expects single-family home prices to increase at a modest pace of 4% with supply at a healthy level of about 6 months. The low level of distressed sales and high levels of home equity will also tend to keep prices firm.
Distressed sales of single-family homes and condominiums/townhomes as a percent of sales are at their lowest levels since the Great Recession at 1% or less across the Southeast Florida counties. A homeowner who purchased a home at the median sales price in 2019 Q4 and sold/valued the home at the median sales price in 2024 Q4 has a home equity of over 50%.
In the condominium/townhome market, MIAMI Realtors® expects the median sales price to stay flat with inventory expected to hit 12 months’ supply in 2025 and 2026.
Geographic markets with low months’ supply and prices that are affordable such as Homestead, Miami Gardens, Sunrise, Riviera Beach, and Port St. Lucie are likely to see faster price appreciation.
Price discounts will likely hover at 5% for homes below $400,000 and at 10% for million-dollar homes.
