How Interest Rates are Impacting Florida Real Estate
Learn how current rates are affecting Florida housing demand and home prices
If you've started researching Florida real estate online and in the process of getting pre-qualified with your lender, you're likely keeping a close eye on interest rates and noticed that they peaked in October 2023 at 7.79% and are still holding at an elevated level of 6.47%, just over two-and-a-half years later. Although rates were on a slow downward trajectory in early 2026, and briefly touched under 6%, they have now pushed back up again due to higher oil prices and inflation fears caused from the Middle East conflict.So how are the now higher interest rates currently affecting the demand for Florida real estate and home prices, and where is the Florida market likely headed going forward? While the Strait of Hormuz was fully closed for the past three months (Mar 2 – Jun 14), and now scheduled to be reopened via Trump’s recent U.S. – Iran deal, Florida home prices have remained mostly flat and inventory levels have decreased a bit over this time, meaning that buyers have continued to step-up in this slightly-higher interest rate environment.
Additionally, economists are now expressing concern that interest rates may remain at these elevated levels longer than initially anticipated as the higher oil prices increase the cost of transporting all goods, and generates inflation. And now, the Fed is chiming in and mentioning that it may even reverse policy and implement a rate increase if the inflation is not transitory, and becomes longer lasting. Not exactly the words that prospective home buyers want to hear, as Florida home prices remain just under all-time highs, but time will tell...
The Effect of Higher Rates on Monthly Mortgage Payments
Now let's take a closer look to see exactly how monthly payments for Florida homeowners have been affected by the now higher interest rates and home prices over the past five years. In the following table, for calendar year 2021 versus present day, we compared the median Florida home price for single family homes, the 30-year interest rate as well as the average monthly payment to see how much they have increased in such a short period of time. Calendar year 2021 was selected as the comparison year as this is before all the inflation and Fed hikes started to take effect. The result is that the median Florida home price has increased by 47%, the interest rate by 109% and the monthly payment by 116%.4
Monthly payment based upon 20% down.
| Variable | Year 2021 |
Year 2026 |
|---|---|---|
| Median Florida Home Price | $290,000 | $425,000 |
| 30-Year Rate | 3.10% | 6.47% |
| Monthly Payment | $990 | $2,142 |
Florida Real Estate Experts' Outlook on Home Prices
As mortgage rates continue to linger in the mid 6% range, even after three rate cuts in 2025 and heightened geopolitical events, we asked our Florida real estate experts what this means for Florida housing prices in the months and year ahead, and how this is currently affecting housing demand. Below are comments from a few of our experts. To view all comments from all experts, be sure to visit out our Florida Real Estate page where our experts provide their market outlook and housing predictions.
Jacksonville
Decreasing Inventory"My outlook for the Jacksonville real estate market thru year-end 2026 is that buyer demand will continue to be healthy. I also expect our Jacksonville home price appreciation to be much less going forward and think we’ll likely see appreciation more in the 1% - 5% range.
Fort Lauderdale
Slightly Low Inventory"The Fort Lauderdale market continues to see consistent housing demand as we approach the 3rd quarter of 2026. This consistent demand is keeping available inventory slightly constrained, but not nearly as extreme as was during the market peak. Housing inventory in Broward County, for single family homes, still remains a bit low at a 5 month supply of homes which is keeping home prices near record levels. For homes in high-demand areas, we are once again experiencing multiple offers taking place, near or slightly above ask price, but again, nowhere near the level we experienced during the market peak.
Lakewood Ranch
Buyers are More Discerning"My outlook for the Lakewood Ranch and Sarasota markets through 2026 is a continuation of the same persistent demand derived from retirees relocating to our region, families seeking our top-ranked schools as well as work-from-home lifestyle changes. However, with the continued higher rates and general increase in the cost of living across the board, we will likely continue to see more and more buyers priced out of our market, allowing inventory levels to continue rising over time. I also expect to only see the realistically-priced and well-marketed listings continue to sell, in addition to continued strong interest from all-cash and heavy-cash buyers.
View all Florida market outlook comments from our experts.
