Riding the Wave: How Lower Rates & Tax Reform Could Spark Florida's Housing Market

1. A Surge in Mortgage Activity: The Spark Florida Needs

In early September, the 30-year fixed mortgage rate dipped to approximately 6.29%–the lowest since October 2024—spurring a nationwide surge in mortgage applications and renewed optimism in the housing market.(Investopedia, AP News)

Purchase applications soared—up 20% year-over-year—while refinance applications climbed 12%.(Investopedia)
The typical borrower now saves more than $120 monthly on a $400,000 loan thanks to lower rates.(Barron's)

For Florida, this means more financially empowered buyers could enter the market—particularly in markets like Tampa, Miami, and SW Florida, where elevated supply has recently outstripped demand.

2. Unlocking Pent-Up Demand & Mobility

For years, many homeowners enjoyed ultra-low mortgage rates (often under 4%), leading to a “golden handcuff” effect—where selling and re-buying doesn’t make financial sense.(Investopedia, Axios, Reddit)

Now, with rates easing, affordability improves—but the real shift comes when rates fall further, potentially below 6% or even into the 5–5.5% range. That’s when more sellers may re-enter the market, increasing inventory.(Investopedia)

Redfin analysis warns that while buyer activity will spike, supply will likely lag—keeping upward pressure on home prices in the short term.(Investopedia)

3. Supply & Affordability: Mixed Signals

Some Florida metros have already seen sizable increases in listings, even up to 50% year-over-year—especially in Sun Belt areas. Still, many homes remain unsold, prompting sellers to reduce prices.(MarketWatch)

Zillow predicts that by the end of 2025:

Home listing prices may drop nearly 2%—the sharpest decline since 2012.
Florida markets (Miami, SW Florida, Tampa) emerge as some of the best bets for buyers.(Better Homes & Gardens)

4. Property Tax Pressures & Reform's Promise

The Rising Burden

Florida homeowners in Tampa, Jacksonville, and Miami have seen monthly property taxes jump 48% to nearly 60% since 2019, worsening affordability.(Redfin, Business Wire, eastlaketarpon.com)

This surge reflects the combination of skyrocketing assessed home values, population growth, and increased funding needs for climate resilience and public services.(Business Wire)

Reform on the Horizon: Amendment 5 & Beyond

Florida’s Amendment 5, approved by over 66% of voters, now ties the homestead exemption (up to $50,000 in assessed value) to national inflation, ensuring the exemption rises each year with CPI.(Kiplinger)

Yet, analysts caution that homeowners may see relatively modest savings—averaging only ~$20 over five years per household—while local governments could lose ~$406 million.(Kiplinger)

More Radical Ideas: Eliminating Property Tax?

Some policymakers and economists (like those at Realtor.com) propose eliminating property taxes entirely to boost affordability.(Florida Insider, BizPac Review, WTOP News)

Proponents argue it would enhance buying power—making homeownership more accessible across the board. Opponents warn it could displace control over local funding, pushing reliance on less flexible revenue sources like state-level sales taxes.(Florida Insider, BizPac Review)

5. What This Means for Florida Buyers, Sellers & Lenders

Stakeholder	Opportunity	Watch-Outs
Buyers	Lower rates boost purchasing power; tax reform may reduce long-term costs. Florida remains a hotspot for value-seeking buyers.	Inventory remains tight. Price drops are modest and localized. Home insurance and ongoing affordability challenges persist.
Sellers	Lower rates may bring more buyers. Early movers could capitalize on competition before price pressure returns.	If rates dip further, supply may increase and temper prices. Market volatility remains.
Lenders & Refi	Spiking refinance interest; purchase applications rebound.	Rate durability depends on Fed policy and economic indicators—uncertainty remains.
Communities	Inflation-indexed exemptions (Amendment 5) bring incremental relief. Could gradually reduce homeowner tax burdens.	Reform could strain municipal budgets. Radical options risk local funding autonomy.

6. Moving Forward: Strategy & Messaging for Sun National Title Company's Real Estate Agent Partners.

Educate buyers and homeowners about how even subtle savings in mortgage rates or property tax exemptions can improve affordability.
Highlight planning opportunities: Selling before rate cuts flood inventory or locking in a home now could be wise for certain buyers.
Position yourself as a trusted advisor on evolving regulations, homestead benefits, and related impacts of tax reform.
Monitor local nuances: Markets like Tampa, Miami, Jacksonville, and Cape Coral might each respond differently—keep your finger on the pulse.

As Florida navigates shifting financial and policy landscapes, lower mortgage rates and property tax reform offer a cautious but real pathway toward revitalizing affordability—at least if managed strategically.