It may come as a surprise amid the noise, negativity, and volatility in today’s new-home market that Florida remains one of the most dynamic homebuilding markets in the country.
The housing landscape in the nation’s third-most-populous state shares a vertiginous, bumpy near-term outlook with other Sun Belt markets.
The region has been challenging for homebuilders. Following the cues of mortgage-rate gyrations and consumer preferences in the wake of the COVID pandemic, they overbuilt speculative – ready-to-own – inventory. As a result, they now need to drop prices and tap their toolbox of concessions and incentives to move that existing inventory, squeezing their profit margins.
Home prices in Florida have been hit particularly hard. According to Zillow data, 15 metro areas in Florida show up among the nation’s 20 metro areas where home prices fell the most between January 2025 and January 2026.
For those reasons, Florida may seem like a highly challenged market writ large. Home prices have fallen throughout the state, and population growth has reverted to its norm after a huge spike during and immediately after the pandemic.
The fact is, conversations with builders and developers that operate in the state reveal a more complex picture. While conditions in many parts of the Sunshine State are full of challenges, taken as a whole, Florida shows surprising resilience.
Florida’s slowing population growth
According to U.S. Census data, Florida gained just 22,517 new residents from 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 Analytics, Central and North Florida, for CoStar Group, told The Builder’s Daily that projections call for population growth to moderate even further in 2026.
There are a number of reasons for the slowdown. Powerful hurricanes raised insurance rates, and a dramatic increase in housing prices means that homes in Florida are no longer the bargain they once were. Florida, which was the fastest-growing state in the nation between 2021 and 2022, also benefited enormously from the pandemic, but the COVID sugar high has long worn off.
“You had that in migration from the COVID crew from California, New York, Boston and Chicago. Everybody came because they could work from home, and Florida was open. And then, in addition to COVID subsiding, you had interest rates that popped,” said Joel Underwood, President at Tri Pointe Homes’ Orlando division. “I think that has a lot to do with why demand slowed down.”
Not all markets in the state are created equal, however.
Census data released on Thursday indicates that some major markets have negative population growth, while many smaller, more outlying areas continue to gain residents.
Pinellas County, home to St. Petersburg, and Miami-Dade County, posted the second and third largest numeric population declines in the country between July 2024 and July 2025.
Meanwhile, Ocala, a small metro area northeast of Orlando, had the highest population growth rate of any metro area in the nation at 3.4%. Lakeland, situated between Orlando and Tampa, ranked fourth.
The data paints a clear picture — population growth remains strong in select affordable pockets, but people aren’t moving to the state’s most expensive regions as they once were.
The Orlando area also remains a bright spot in the state. Despite not growing as quickly as it was a few years ago, Orlando was the fastest-growing large metro area in Florida between 2024 and 2025, and ranked 10th nationally by numeric 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 top-tier locations provides an edge over entry-level builders that focus on more tertiary markets.
“The fundamentals in Central Florida for real estate depend on where you are,” Underwood said. “For Tri Pointe, we prefer to find those main and main locations where we can deliver a premium brand in a premium location and design our product to fit that location and that land. For us, it’s been an opportunity to continue to look for 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 Homes, based in the Palm Beach area, pointed to Port St. Lucie as another strong submarket in the state. Positioned just north of Palm Beach County, Port St. Lucie is within commuting distance of the West Palm Beach area. It also offers a much more affordable price point.
Akel Homes recently unveiled a luxury 55+ community in Port St. Lucie, and there’s been a lot of interest from buyers from more expensive markets in South Florida, as well as from out-of-state retirees. The 55+ segment, both locally and nationally, continues to outperform the homebuilding market as a whole.
“They’re coming from New York, New Jersey, Connecticut and Pennsylvania, and they want to be in Port St Lucie. The same can’t be said about some other markets,” Akel said, pointing to Southwest Florida submarkets like Cape Coral, Port Charlotte and Fort Myers as being particularly challenged.
Market dynamics, unsurprisingly, vary throughout the state.
“It varies depending on where in Florida. A lot of Florida markets have gone up in price so much that people have been priced out. You’ve seen that more with families, and obviously, retirees. But what ends up happening is that pockets of Florida still perform 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 of why.
Four of the five United States metro areas that experienced the biggest drop 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 steep price corrections.
Marshall Gobuty, Founder and President of Bradenton-based Pearl Homes, builds almost exclusively in Manatee County, located just south of the Tampa area.
Pearl Homes hasn’t reduced pricing yet. If he can, Gobuty would rather wait for the market to correct itself since he has homes in prime locations, many of which are right off the water. However, his incentives have shot way up over the last 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 worth of damage in Manatee County. Less than two weeks later, Category 3 Hurricane Millton made landfall nearby, causing 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-resilient features, was partially built when Hurricane Helene made landfall. There was no flooding and no insurance claims, but the nearby damage from the 2024 hurricane season clearly affected buyers’ psychology.
“We’re so close to Anna Marie Island. Our front door is the bridge to the island. People were so hesitant because of all the losses there, that it affected us,” Gobuty said.
Finding a bottom
There is evidence that the housing market in Southwest Florida may have reached a low point and could soon normalize. Zillow forecasts that home prices in Southwest Florida overall will be relatively flat or decline only slightly in 2026, a major improvement from last year.
Gobuty acknowledged that conditions in the Bradenton area are still tough. National dynamics, such as high mortgage rates and affordability constraints, are a factor, and local conditions, such as hurricane damage and increasing insurance rates, are clearly a concern. However, there have been some positive signals so far this year.
“Traffic is up. The people who are taking a second look are up. It used to be one or two looks, and now we’re talking about three to five looks, because there’s just so much hesitancy,” Gobuty explained. “We’re getting more interest, and our leads are up over 15% compared to last month. I don’t want to chase myself, but I think we’re out of the worst part of it. But we’re still not in a great time.”
Insurance rates have been a big problem for many Southwest Florida buyers following the difficult 2024 hurricane season. Lucienne Pears, VP of Economic and Business Development at Babock Ranch, a master-planned community near Fort Myers, said that home insurance alone is a major hindrance.
In certain cases, rates tripled or quadrupled after 2024, forcing some residents to move and pushing some potential buyers out of the market. Even though Babcock Ranch ranked as the nation’s fourth best-selling master-planned community last year, Southwest Florida, Pears conceded, is the most challenged homebuilding market in the state.
“A number of builders say they’re going to burn through the inventory they have. They have a large amount of standing inventory,” Pears said. “So they’re heavily focused on only starting new builds when there’s a contract, not doing any speculative building and burning through their inventory because they have so much spec out there already.”