It may be surprising, amid the noise, negativity and volatility of the current new home market, that Florida remains one of the most dynamic home construction markets in the country.
The real estate landscape in the nation’s third-most populous state shares a dizzying and bumpy near-term outlook with other Sun Belt markets.
The region has been a challenge for homebuilders. Taking cues from changes in mortgage rates and consumer preferences in the wake of the COVID pandemic, they overbuilt speculative (ready-to-buy) inventory. As a result, they now need to lower prices and leverage their toolbox of concessions and incentives to move that existing inventory, reducing their profit margins.
Florida home prices have been especially hard hit. According Zillow According to data, 15 Florida metropolitan areas appear among the 20 metropolitan areas in the country where home prices fell the most between January 2025 and January 2026.
For those reasons, Florida may seem like a very challenging market. Home prices have fallen across the state and population growth has returned to normal after a huge increase during and immediately after the pandemic.
The fact is that conversations with builders and developers operating in the state reveal a more complex picture. While conditions in many parts of the Sunshine State are challenging, as a whole, Florida shows surprising resilience.
Florida’s slowing population growth
According US Census DataFlorida gained just 22,517 new residents thanks to net domestic migration last year, down from 58,411 in 2024, 183,646 in 2023 and 310,892 in 2022. Lisa McNatt, director of market analysis, central and northern Florida, for CoStar Groupsaid The builder’s diary that projections call for population growth to moderate further in 2026.
There are several reasons for the slowdown. Powerful hurricanes drove up insurance rates and a dramatic rise in home prices means homes in Florida are no longer the bargain they once were. Florida, which was the fastest-growing state in the country between 2021 and 2022, also benefited greatly from the pandemic, but the COVID sugar high is long gone.
“There was that in the migration of the COVID team from California, New York, Boston and Chicago. They all came because they could work from home and Florida was open. And then, in addition to COVID subsiding, interest rates skyrocketed,” said Joel Underwood, president of Houses in Tri PointeOrlando Division. “I think that has a lot to do with why demand slowed down.”
However, not all markets in the state are the same.
Census data released Thursday indicates that some major markets are experiencing negative population growth, while many smaller, outlying areas continue to gain residents.
Pinellas County, home to St. Petersburg, and Miami-Dade County, recorded the second and third largest numerical population declines in the country between July 2024 and July 2025.
Meanwhile, Ocala, a small metropolitan area northeast of Orlando, had the highest population growth rate of any metropolitan area in the country at 3.4%. Lakeland, located between Orlando and Tampa, ranked fourth.
The data paints a clear picture: Population growth remains strong in select, affordable areas, but people are not moving to the most expensive regions of the state as they once did.
The Orlando area also remains a bright spot in the state. Despite not growing as fast as a few years ago, Orlando was the fastest-growing large metropolitan area in Florida between 2024 and 2025, and ranked 10th nationally for numerical growth.
Tri Pointe Homes announced its expansion into Florida in April 2024, when it opened its Orlando division. Outside observers questioned why Tri Pointe decided to enter the state at a time when market conditions seemed somewhat unfavorable. However, Central Florida is stronger than other parts of the state, Underwood said, and Tri Pointe’s emphasis on prime locations provides an advantage over entry-level builders who focus on more tertiary markets.
“The basics of real estate in Central Florida depend on where you are,” Underwood said. “For Tri Pointe, we prefer to find those prime locations where we can offer a premium brand in a premium location and design our product to fit that location and that country. For us, it’s been an opportunity to continue to pursue those premium locations.”
Tri Pointe recently delivered its first Florida community in New Smyrna Beach, located an hour northeast of Orlando, just a few blocks from the ocean. The Orlando division continues to grow with several other projects in prime locations.
Alex Akel, president of Akel Housesbased in the Palm Beach area, pointed to Port St. Lucie as another strong submarket in the state. Located just north of Palm Beach County, Port St. Lucie is a short drive from the West Palm Beach area. It also offers a much more affordable price.
Akel Homes recently opened a luxury 55+ community in Port St. Lucie, and there has been a lot of interest from buyers in more expensive markets in South Florida, as well as out-of-state retirees. The 55+ segment, both locally and nationally, continues to outperform the home construction market as a whole.
“They come from New York, New Jersey, Connecticut and Pennsylvania, and they want to be in Port St Lucie. The same can’t be said for other markets,” Akel said, pointing to Southwest Florida submarkets such as Cape Coral, Port Charlotte and Fort Myers as those that are particularly challenged.
As expected, market dynamics vary across the state.
“It varies depending on where you are in Florida. Many Florida markets have raised their prices so much that people have been left out. That’s been seen more with families and obviously retirees. But what ends up happening is that areas of Florida are still performing exceptionally well,” Akel said.
Akel, along with other homebuilders in Florida, pointed to Southwest Florida as the most challenging homebuilding environment in the state. A look at how much the region’s prices fell last year is a good indication why.
Four of the five U.S. metropolitan areas that experienced the largest decline in home prices between January 2025 and January 2026 were in Southwest Florida. Punta Gorda (-11.93%), Cape Coral-Fort Myers (-9.19%), North Port-Sarasota-Bradenton (-7.54%) and Naples-Marco Island (-5.97%) each had strong price corrections.
Marshall Gobuty, founder and president of Bradenton Pearl HousesIt builds almost exclusively in Manatee County, located just south of the Tampa area.
Pearl Homes has not yet reduced prices. If he can, Gobuty would prefer to wait for the market to correct, as he has homes in prime locations, many of which are right next to the water. However, its incentives have skyrocketed in the past two years as buyers remain hesitant.
In 2024, Category 4 Hurricane Helene caused widespread damage along Florida’s Gulf Coast, including an estimated $350 million in damage in Manatee County. Less than two weeks later, Category 3 Hurricane Millton made landfall nearby and caused even more damage.
One of Pearl Homes’ new communities, Hunters Point, is located off the water in a community called Cortez. It is just minutes from Anna Maria Island, which is still rebuilding after being hit hard by Hurricane Helene.
Hunters Point, designed with hurricane-resistant features, was partially built when Hurricane Helene made landfall. There were no floods or insurance claims, but nearby damage from the 2024 hurricane season clearly affected buyers’ psychology.
“We are very close to Anna Marie Island. Our gateway is the bridge to the island. People were so hesitant because of all the losses there, it affected us,” Gobuty said.
Find a background
There is evidence that the housing market in Southwest Florida may have hit a low point and could soon normalize. Zillow forecasts that home prices in Southwest Florida overall will remain relatively stable or decline only slightly in 2026, a significant improvement from last year.
Gobuty acknowledged that conditions in the Bradenton area remain difficult. National dynamics, such as high mortgage rates and affordability constraints, are a factor, and local conditions, such as hurricane damage and rising insurance rates, are clearly a concern. However, there have been some positive signs so far this year.
“Traffic has increased. People taking a second look has increased. It used to be one or two glances, and now we’re talking three to five glances, because there’s a lot of hesitation,” Gobuty explained. “We’re generating more interest and our leads are up more than 15% compared to last month. I don’t want to chase myself, but I think we’re past the worst of it. But we’re not in a good place yet.”
Insurance rates have been a big issue for many Southwest Florida buyers following the difficult 2024 hurricane season. Lucienne Pears, vice president of economic and business development at Babock Rancha planned community near Fort Myers, said home insurance alone is a major hurdle.
In certain cases, rates tripled or quadrupled after 2024, forcing some residents to move and driving some potential buyers out of the market. Although Babcock Ranch ranked as the nation’s fourth-best-selling master-planned community last year, Southwest Florida, Pears admitted, is the most challenging homebuilding market in the state.
“A number of builders say they’re going to use up all the inventory they have. They have a lot of permanent inventory,” Pears said. “So they are very focused on starting new construction only when there is a contract, not doing any speculative construction and depleting their inventory because they already have a lot of specifications available.”
