While much of the United States is ending January with bitterly cold weather, signs of a thaw are emerging in Florida’s housing market after years of stagnation. This is by no means an “all clear” signal. Rather, it reflects a regional shift, with Sun Belt states transitioning from a period of rising inventory and low transaction levels to one of stable inventory, transaction growth and more robust price discovery.
The key dynamic in Florida is that inventory is no longer increasing, a big change from the past few years when unsold houses steadily accumulated on the market. Active inventory in Florida rose just 5% year over year in December, according to Lance Lambert of ResiClub Analytics, less than the 12% increase for the US overall and less than the build-up in most of the Northeast and Midwest. So far in January, Compass Inc. Chief Economist Mike Simonsen has seen no change in active inventory for single-family homes in Florida, teeing up a possible year-over-year decline for the first time in years.
This stabilization doesn’t mean demand is surging. Far from it. Redfin Corp. reports that home sellers continue to outnumber buyers in all of the key Florida metro areas. And prices are still falling year over year in both Tampa and Miami, based on the most recent release of the S&P Cotality Case-Shiller indexes.
Still, stable inventory reflects progress on the path back to normalization in transactions and affordability.
Florida saw a surge in delistings in the fourth quarter of 2025, along with the rest of the country, as sellers accepted that demand didn’t exist at the price points they had in mind. Many of those homes are now coming back onto the market at the same time that mortgage purchase applications have risen and real-time measures of pending home sales are up — though without a pickup in prices.
It appears homeowners are being more realistic about pricing and are more motivated to sell, and buyers in Florida are responding to the best affordability levels in years — prices are down modestly, incomes have grown and mortgage rates are near their lowest levels since 2022.
Homebuilders and people outside Florida shouldn’t assume that improvements in the state will naturally carry over to them. DR Horton Inc., the only major publicly traded homebuilder to have reported earnings so far this year, again lowered its guidance for profit margins for the first calendar quarter of 2026 due to sluggish demand for new homes. Homeowners willing to cut their asking prices creates more competition for builders, further pressuring profitability.
Earlier optimism that the White House would move meaningfully to improve affordability has also drained from the market, beating down the stocks of DR Horton and peers Lennar Corp. and KB Home.
Florida’s stabilization is coming three and a half years after inventory began rising sharply. Much of the country, particularly the Northeast and Midwest, is much earlier in this inventory normalization process and has barely begun seeing affordability improve. If the spring of 2026 is when green shoots emerge in some Sun Belt metros, the path forward in the Northeast and Midwest is likely first a prolonged period of inventory growth and price moderation.
