South Florida Housing Market Defies Higher Rates as Luxury Demand and Migration Fuel Growth

By Gay Cororaton, MIAMI REALTORS® + RWorld Chief Economist

 

Key Takeaways:

1. With the Fed committing to deliver price stability, mortgage rates are likely to remain elevated in 2026, with mortgage rates pushing to 7% by year end but declining to 6.5% by year-end of 2027.
2. Amid elevated mortgage rates, South Florida’s home sales are projected to increase 4% in 2026 and 5% in 2027, with million-dollar sales likely to continue to gain market share.
3. Home affordability will continue to drive migration within South Florida, with the largest single-family affordable inventory in Port St. Lucie and condo inventory in Broward County. At the same time, wealth migration will continue to drive million-dollar sales, with Miami-Dade, Palm Beach County, and Martin County as the key million-dollar markets.

 

Download the   2026-2027 South Florida Housing Outlook September 2026 Update HERE.

 

 

1. Mortgage rates are likely to remain elevated in 2026, with mortgage rates continuing to hover at 7% by the end of 2026 but declining to 6.5% by end of 2027.

 

The South Florida housing market remains resilient, driven by high-end sales, migration, and limited inventory, with prices continuing to rise despite higher mortgage rates

MIAMI REALTORS® + RWorld September 2026 Outlook  Update projects the 30-year mortgage rate to hover at 7% through the fourth quarter of 2026 and to ease to 6.5% by the end of 2027 as inflation slows due to tighter monetary policy and as oil prices trend  downward. The projections are slightly revised upwards from the June 2026 Update (6.7% and 6.4% respectively).

At its September 15-16 meeting, the FOMC raised the federal funds rate target for the first time since July 2023 by 0.25 percentage points to a range of 3.75% to 4.0%. The September Summary of Economic Projections (SEP) indicates one more rate hike in 2026.¹ Financial participants are pricing in another rate hike at the October 27-28 meeting and a 44% likelihood of another rate hike at the January 26-27 meeting.² Our projection assumes a rate hike at the October 2026 meeting and at the January 2027 meeting as the Fed commits to bring down inflation to 2% while AI-related spending supports sustained economic expansion. The FOMC expects US GDP to expand at a year—over-year pace of 2.3% at the end of 2026 and by 2.4% at the end of 2027.

 

2. Amid elevated mortgage rates, South Florida home sales are poised to increase 4% in 2026 and 5% in 2027, driven by high-tier buyers.

 

MIAMI Realtors®+RWorld projects South Florida’s existing home sales to increase 4.3% in 2026 and 4.8% in 2027, slightly higher projections compared to the June 2026 Outlook Update (3% and 3.6% respectively).

Single-family sales are projected to increase 5% in 2025 and 5.5% in 2026. In the condominium/townhome market, sales are projected to increase 3.4% in 2026 and in 2027.

High-end buyers are a key market driver in South Florida’s real estate market. Year-to-date sales single-family sales rose 7.5% but million-dollar rose 23.3%. In the condo/townhomes market, year-to-date condominium/townhome sales rose 5.2% while million-dollar sales rose 17.6%. Year-to-date, 60% of South Florida’s million-dollar sales are all-cash compared to 42% for all sales. A higher share of wealthier and cash buyers has made South Florida’s home sales more resilient to the impact of rising mortgage rates.

A resurgence in migration from high tax states and a rising share of job switchers in higher-paying industries is supporting the home sales rebound, and this trend is likely to continue in 2027. Among out-of-state job movers in the past four quarters ended 2025 Q1, the average wage in the Miami MSA destination job was $140,000 compared to  $61,088 among in-state job movers. Miami Job Migration Generates $3.6 Billion in Net Wage Gains – MIAMI REALTORS® + RWorld

 

 

3. Home affordability will drive migration within South Florida, with St. Lucie County and Broward County having the most inventory of homes affordable for the average wage earner.

 

Of the 10 markets with the largest active inventory of single-family homes ($462,000 and below, which is the affordable price for a 2-earner household earning average weekly wage), four are in St. Lucie County (Port St. Lucie, Fort Pierce Lakewood Park, Indian River Estates), three in Broward County (Pompano Beach, Tamarac, North Lauderdale), two in Palm Beach County (Boynton Beach, Riviera Beach), and one in Martin County (Hobe Sound).

For condominiums/townhomes, Broward County has seven of the top 10 markets with the largest active inventory of units affordable for a 2-earner household earning average wages (Hollywood, Hallandale Beach, Pompano Beach, Deerfield Beach, Pembroke Pines, and Sunrise).

 

4. Wealth migration will continue to bolster demand for million-dollar market, with Miami-Dade and Palm Beach at the epicenter.

South Florida’s low tax burden, a coastal lifestyle, global diversity, and a shift towards high-skilled jobs will continue to bolster the growth of the million-dollar and luxury market. Palm Beach County, Miami-Dade County, and Martin County will continue to drive most of the million-dollar sales market.

In the single-family segment, Miami-Dade County had five of the 10 hottest million-dollar markets as of August 2026 (Kendall, Sunset, Surfside, Coral Gables, and Palmetto Bay). Palm Beach had four (Jupiter, Boca Taton, Palm Beach Gardens, and Tequesta). Broward had one county (Parkland).

In the condo/townhome market, the town of Palm Beach in Palm Beach County was the hottest condo/townhome market with 6 months’ supply. Other hot markets with 12 months’ supply or less and where the median days in  market were less than one year were Highland Beach, Key Biscayne, Bal Harbour, and Surfside (the only city with both hot single-family and condominium market).