Miami’s persistent housing shortage has intensified affordability challenges, with median home prices rising 18% year-over-year and vacancy rates at a record low of 1.7%. The strain is accelerating demand for residential development and impacting regional economic dynamics.
- Miami’s housing shortage exceeds 35,000 units, driving affordability strain.
- Median home price in Miami reached $748,000 in November 2025, up 18% YoY.
- Vacancy rate fell to 1.7%, the lowest in over ten years.
- Only 12,000 new units completed in 18 months, below the 20,000 needed annually.
- Equity investment in Miami real estate rose 34% in Q3 2025.
- Companies like Codina (DRE), Penn National (PENN), and PSA (PSA) are expanding development efforts.
Miami’s housing market continues to face severe constraints, with a shortage of approximately 35,000 units driving up prices and reducing accessibility for middle- and low-income residents. Data shows that the median home price in the metropolitan area reached $748,000 in November 2025, a nearly 18% increase from the same period in 2024. At the same time, the city’s overall vacancy rate has declined to 1.7%, the lowest level in over a decade, indicating tight supply-demand balance. The shortage is particularly acute in multifamily housing, where new construction approvals have lagged behind population growth. In the past 18 months, only 12,000 new residential units were completed, falling short of the 20,000 units needed annually to meet demand. This imbalance has prompted local developers and real estate investment trusts to shift focus toward high-density projects, with companies like Codina Properties (DRE) and Penn National (PENN) expanding their footprint in the region. Market participants are responding with increased capital deployment: equity flows into Miami-based real estate funds rose 34% in Q3 2025, while mortgage interest rates for first-time homebuyers have climbed to 7.8%, further limiting access. The situation has also drawn attention from financial analysts, who note that sustained pressure could influence Federal Reserve policy considerations in 2026, particularly around regional housing inflation metrics. Stakeholders across the real estate and construction sectors are adapting. Developers such as PSA (PSA) have announced plans for 8,000 new units by 2027, while local governments are revising zoning regulations to allow higher-density builds. However, rising land costs and permitting delays remain key bottlenecks, with average construction timelines increasing by 14% since 2023.