Florida's housing market showed renewed signs of activity in August 2025, as a drop in mortgage rates prompted a significant increase in new pending home sales. According to data from Florida Realtors®, this surge in buyer contracts marks a potential turning point after a period of slower market conditions.
The increase in pending sales, which are a forward-looking indicator of future closed sales, was observed across both single-family homes and the condominium and townhouse sector. This development suggests that lower borrowing costs are successfully drawing buyers back into the market.
Key Takeaways
- New pending sales for single-family homes in Florida increased by 9.9% year-over-year in August 2025.
- Condo and townhouse pending sales rose by 4.9%, the first positive year-over-year growth since October 2023.
- The primary driver for this increase is a notable drop in mortgage rates during August.
- Median sales prices experienced a slight decline, with single-family homes at $410,000 and condos at $290,000.
- Inventory levels are stabilizing, with a 5.3-month supply for single-family homes and a 9.3-month supply for condos.
Mortgage Rate Drop Fuels Buyer Activity
The central factor behind the recent market shift is the reduction in borrowing costs. A decrease in mortgage rates throughout August made homeownership more accessible, encouraging prospective buyers who had been waiting on the sidelines.
Dr. Brad O’Connor, Chief Economist for Florida Realtors®, identified this trend as the most likely cause for the uptick in new contracts. The improved affordability provided by lower rates appears to have restored confidence among buyers, leading to the largest year-over-year increase in pending sales for single-family homes since November of the previous year.
Understanding Market Indicators
Pending sales represent signed contracts that have not yet closed. They are considered a leading indicator, often predicting closed sales trends by 30 to 90 days. In contrast, closed sales are a lagging indicator, reflecting market activity from previous months.
Detailed Look at Market Segments
The renewed activity was not uniform across all property types. The data reveals distinct trends for single-family homes compared to condominiums and townhouses, though both saw positive growth in new contracts.
Single-Family Homes Show Strongest Growth
The single-family home market experienced a significant rebound. New pending sales for these properties jumped 9.9% compared to August 2024. This represents the most substantial year-over-year growth in this metric since the nearly 13% increase recorded in November 2024.
Analysts note that this level of year-to-year growth in new contracts for single-family homes has not been consistently seen since the highly active market of early 2021. This indicates a potentially robust return of buyer demand in this segment.
Condos and Townhouses See Positive Turn
The condominium and townhouse market, which had been experiencing a more prolonged slowdown, also showed signs of recovery. New pending sales for these properties increased by 4.9% compared to the same month last year.
A Welcome Reversal
The 4.9% increase in pending sales for condos and townhouses is significant because it is the first time this segment has posted positive year-over-year growth since October 2023. It is only the second time it has done so since November 2021, signaling a potential stabilization for this part of the market.
While the growth was more modest than in the single-family sector, this positive movement is a crucial indicator for a segment that often serves as a more affordable entry point for homebuyers.
Price and Inventory Analysis
While contract activity increased, the latest report also provided key insights into pricing and the availability of homes for sale. The data points toward a market that is becoming more balanced, with slight price adjustments and stabilizing inventory levels.
Median Prices Show Slight Softening
Median sales prices in August reflected a minor cooling trend, which can improve affordability for buyers. The statewide median price for existing single-family homes was $410,000, a slight decrease of 0.4% from August 2024.
The condo and townhouse sector saw a more pronounced adjustment. The statewide median price for these units was $290,000, representing a 6.5% decline from the previous year. This price softening, combined with lower mortgage rates, likely contributed to the increase in buyer activity.
Inventory Levels Approach Balance
On the supply side, inventory levels are stabilizing, which helps create a healthier market environment. As of August 2025, the data showed:
- Single-Family Homes: A 5.3-month supply.
- Condo/Townhouse Properties: A 9.3-month supply.
A market with a 4-to-6 month supply is generally considered balanced, neither favoring buyers nor sellers. The 5.3-month supply for single-family homes suggests the market is in this balanced territory. The higher supply for condos provides buyers in that segment with more options.
Expert Outlook for Florida Real Estate
Industry leaders are optimistic that the increase in pending sales could signal a more active period for the Florida housing market in the coming months. The combination of stabilizing economic factors and continued demand for housing in the state supports a positive outlook.
"The most probable driver for this surge in new contracts is the significant drop in mortgage rates that occurred early and then again late in August," stated Dr. O'Connor. He added that with rates continuing to fall into September, he is optimistic the trend will continue.
Tim Weisheyer, the 2025 President of Florida Realtors®, also commented on the market's resilience. He noted the dynamic nature of Florida's real estate market and cited continued demand from people moving to the state as a key factor. As the national economy stabilizes and the Federal Reserve adjusts its policies, market competition is expected to evolve.
While closed sales for August were down year-over-year—a 3.9% drop for single-family homes and a 6.0% drop for condos—this is expected. Because closed sales lag behind pending sales, the increase in August's contract signings is anticipated to translate into higher closed sales figures in September and October, reflecting a market that is responding directly to improved economic conditions.
