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 7.03%, exactly three 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 completely closed for three months earlier this year, and now somewhat open while the U.S. and Iran are back and forth with threats of escalation, Florida home prices have remained mostly flat and inventory levels have consistently decreased a bit (each month) 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 (via higher diesel prices) and this generates inflation. And now, the Fed has chimed in and implemented a quarter-point rate increase (mid-September) and hinted at additional rate hikes in latter 2026 as they see the inflation as longer lasting, rather than transitory. Not exactly the words that prospective home buyers want to hear, as Florida home prices remain near all-time highs, but time will tell...
Monthly Mortgage Payments (2026 vs. 2021)
Let's now take a closer look to see exactly how monthly payments for Florida homeowners in 2026 compare to 2021. Calendar year 2021 was selected as the comparison year as this is before all the inflation and Fed hikes started to take effect. As shown in the table below, the result is that the median Florida home price has increased by 43%, the interest rate by 127% and the monthly payment by 124%.| Variable | Year 2026 |
Year 2021 |
% Change |
|---|---|---|---|
| Median Florida Home Price | $415K | $290K | + 43% |
| 30-Year Rate | 7.03% | 3.10% | + 127% |
| Monthly Payment | $2,216 | $990 | + 124% |
How Rising Rates Affect Monthly Payments
A rise in mortgage rates can have a substantial impact on one's monthly payment. In the following example, for a home valued at $500K, we list the monthly payment amount at various rates, for a 30-year mortgage. As the rate increases, the extra cost per month can be substantial, and adds up over time.$500K Home, 20% Down, 30-Year Mortgage
| Interest Rate | 5% | 6% | 7% | 8% |
|---|---|---|---|---|
| Monthly Payment | $2,147 | $2,398 | $2,661 | |
| Extra Per Month | - | $251 | $514 | |
| Extra Per Year | - | $3K | $6.2K | |
| Extra Over 30 Yrs | - | $90K | $185K |
Florida Real Estate Experts' Outlook on Home Prices
As mortgage rates continue to linger in the upper 6% range, due to heightened geopolitical events and rising oil prices, 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 heading into next year 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
Low Inventory Continues"The Fort Lauderdale market continues to see consistent housing demand as we transition into the last 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 low at a 4.3 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 heading into 2027 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 heavily-financed buyers priced out of our market. I also expect to only see the realistically-priced and well-marketed listings continue to sell.
View all Florida market outlook comments from our experts.
