A Look at Why Miami’s Housing Market Is Cooling

The real estate market in Miami has enjoyed an incredible run over the last few years, demonstrating rapid, sustained growth as the global economy has recovered from the COVID-19 pandemic and related financial crisis. During the post-COVID-19 housing boom, Florida (and the Miami area in particular) solidified its reputation as one of the most desirable destinations for new home buyers. Both domestic and international migration fueled this sustained boom, with Miami’s growing business sector, improved transportation and shipping infrastructure, vibrant nightlife, mild weather, access to the coast, and status as a cultural melting pot attracting both new home owners and commercial real estate investors at an unprecedented rate.

Between the beginning of 2021 and the end of 2022, the housing market in Florida’s metro area boomed. Single-family home prices increased by an average of nearly 40 percent, while condos increased by even more, at an average of nearly 50 percent. Miami was already known as a tourism and luxury lifestyle hub, but in the post-COVID-19 landscape it began to attract more high-net-worth individuals, remote workers, and big investors, leading to increased growth. This was further supported by an outmigration of the wealthy and upper middle class from cities such as Los Angeles, San Francisco, and New York City.

Over the last decade, the Federal Housing Finance Agency found that the All-Transactions House Price Index in the Miami area rose by 89 percent, far outpacing the national average of 81 percent. Considering the fact that Miami real estate was already quite desirable (and priced accordingly), this growth has resulted in industry-leading numbers. The median price of a single-family home in Miami-Dade, Palm Beach, and Broward Counties tripled between 2013 and 2023, with an average increase of $340,000.

Housing Market Slowdown

Over the past year and a half, however, it appears that the real estate market in Miami—and the housing market, in particular—has begun to cool down. The year-over-year price increase for single-resident homes in Miami in early 2025 was down around 3.4 percent—a dramatic decrease from the past few years—while condos in Miami have actually seen a decrease of 3.4 percent. While it would be a stretch to say that the bottom has fallen out of the Miami housing market, it has certainly slowed down from the record growth seen in 2021 and 2022.

There are a number of reasons for the stabilization of the housing market in Miami. The first is the simple fact that the post-pandemic migration boom has begun to slow. With many professionals returning to the office (and no longer able to work remotely) and the high-net-worth people who were motivated by the pandemic to move now comfortably relocated, the net domestic migration into Florida fell from 314,000 in 2022 to 64,000 in 2024. International migration into the Miami area has also slowed over the past two years.

High Interest Rates

A second factor that has led to a slowdown in the housing market is the high interest rates that have been in place nationwide for approximately two years. After a period of record low interest rates, the Fed was forced to raise rates to try to bring down skyrocketing inflation caused by pandemic supply chain disruptions and the war between Russia and Ukraine. While inflation in the United States came down much more quickly than most countries around the world, interest rates remain relatively high at the moment, which has resulted in more expensive mortgages, which naturally have a dampening effect on the real estate market.

Miami’s condo market in particular has been impacted over the past two years, after Florida created new, stricter laws regulating safety and inspections for condominiums in response to the Surfside condo collapse in 2021. This has made older condos a risky purchase with built-in long-term expenses, such as higher special assessments and HOA fees that are being increased to cover the cost of upgrades. 

Increase in New Home Construction

At the same time, home insurance has increased dramatically throughout the United States over the last few years, after a number of natural disasters led to widespread housing losses and financial strain for insurance companies. The average cost of home insurance in the United States has risen by 33 percent since 2020, and Florida homeowners have suffered even higher increases due to the risk of hurricanes and a rise in home prices and construction costs.

Finally, in a time of widespread housing shortages throughout the United States (including in the Miami area), Florida has seen a relatively rapid increase in new home construction. While this growth in real estate development hasn’t corrected the housing shortage in the Miami area, it has helped to relieve it slightly—a fact that has contributed to the overall cooling of the real estate market in Miami.

Ultimately, Miami remains one of the most attractive real estate markets in the country, with a steady flow of new homebuyers and investors fueling continued growth. However, compared to the boom of the past few years, the market now appears to be in a stabilizing phase—a factor that prospective investors should take into consideration when making investment decisions.