A decent job market and lower mortgage rates underpin the outlook for South Florida's housing market in 2026.
Of course, that could be said for just about any year when it comes to the region's boom-and-bust real estate market.
Except there was no classic "bust" despite the higher borrowing rates and condo building concerns in 2025. Instead, limited supply of single family homes kept prices firm and the newly built condo market — usually units at luxury prices — helped limit the damage for the overall condo market.
What could 2026 bring? Well, let's start with the year that was.
How was 2025 for the real estate market?
It was an “okay” year for single family homes. But this being South Florida, an “okay” year can feel like a weak market. After the COVID-fuel boom in prices, a year with little or no price growth feels different.
For condos — 2025 started out looking like it could be a tough year. Prices were falling and a lot more condos were coming onto the market looking for buyers, especially older condos in buildings subject to the reforms put in place after the collapse of the Champlain Towers South condo building in Surfside.
But as the year progressed, lower prices and lower mortgage rates helped bring in buyers and the condo market was showing early signs of stabilizing at year’s end.
If the market is showing signs of improvement, how is 2026 shaping up?
What had been headwinds are turning into tailwinds. First, mortgage rates have been coming down. That does two things.
First, and most importantly, it lowers the monthly payment for homebuyers who borrow money.
Second, it helps encourage homeowners to sell their homes if they have a mortgage at a really lower interest rate. They won’t face a mortgage rate around 7% if they’re looking to move.
The Miami Realtors Association predicts a 30-year fixed rate mortgage will drop to 5.8% by the end of 2026. That would save a homeowner with a half million dollar mortgage more than $100 a month, which adds up.
The realtors group thinks the drop in the pace of condo sales will slow down, which is positive, accompanied by lower mortgage rates. But it still forecasts a slowing condo market.
And South Florida makes the list of housing markets most likely to cool in 2026 by real estate firm RedFin.
What could be holding the condo market back from doing better?
Time.
The market adjusting to the reforms after the Surfside collapse. Lawmakers reformed the reforms again in 2025 giving condo associations more time and more options to get their financial house in order. The drive to shore up condo association budgets and make repairs led to higher monthly fees and sometimes special assessments. Those acted as further brakes on the condo market.
What does all this mean for people hoping to buy a home or condo?
Lower borrowing rates helps affordability. More properties for sale help give buyers more choice and more negotiating power. But median condo and home prices remain expensive compared to median wages.
A recent Bankrate study shows that fewer than 1 in 200 homes on the market are within reach for a typical household in Miami.
The region’s job market has remained strong and wages have been growing thanks to healthcare and professional jobs.
And what’s the outlook for renters in the new year?
After years of big rent increases, Miami again was the number one hottest rental market as ranked by real estate data firm RentCafe.
There have been a lot of apartment buildings in the past few years, but demand remains high thanks to population growth and the high price to buy a home.
There remains a lot of competition for rentals. RentCafe found that every vacant apartment in Miami attracts 19 interested renters.
How might the fate of property taxes impact the housing and rental markets in 2026?
If voters approve a constitutional amendment to reduce, limit or eliminate some local property taxes, it wouldn’t take effect in 2026. But if some reduction is okayed, it likely will raise property values for homes while putting more of a property tax burden on apartment owners, who would be likely to pass that along to renters.
What about the commercial property market? There had been worry about the value of office buildings plummeting. What’s the outlook for commercial real estate?
The South Florida commercial real estate market has proven resilient. A report from TD Bank said Miami is on "relatively strong footing."
Vacancy rates are lower than national rates and new construction is strong with a lot of that space already leased thanks to the expanding job market.
