Florida Rental Market Report: Q2 2025 Insights

Florida’s rental market is cooling in Q2 2025 after years of rapid growth. Here’s what you need to know:

• Median rents statewide dropped from $2,125 in March to $2,090 in May 2025.
• Vacancy rates rose to 6.9% in May, up from 5.8% a year ago, due to an oversupply of new rental units.
• Miami rents fell 6.2% year-over-year to $3,000, with vacancy rates climbing to 7.8%.
• Tampa and Orlando rents also declined by 5% and 4.3%, respectively, while Jacksonville and Cape Coral remained stable or saw slight increases.
• Florida added 50,000+ new rental units over the past two years, with Miami contributing nearly 20,000 units.

For investors, this “rebalancing period” means more opportunities in stable markets like Jacksonville and Cape Coral, while managing risks like rising insurance costs and regulatory changes is crucial.

Landlords going into default. Florida rental market on verge of collapse.

Florida Rental Market Data: Key Numbers and Trends

Florida’s rental market is undergoing a noticeable shift after a period of rapid growth, presenting new dynamics for investors to consider. The statewide median rent dropped to $2,090 in May 2025, following a decline from $2,125 in March and $2,100 in April. Meanwhile, multifamily vacancy rates statewide climbed to 6.9% in May 2025, compared to 5.8% a year earlier. These figures highlight a softening market, with significant regional variations providing a deeper understanding of the trends.

Median Rent Prices and Vacancy Rates Statewide

The increase in vacancy rates, while seemingly small at 1.1 percentage points, translates to thousands of additional vacant units across Florida. Nationally, rents remain relatively stable, with only a 1–2% rise, which further emphasizes Florida’s contrasting rental trends. Even nearby markets like Atlanta have experienced a 2% year-over-year rent increase, showcasing a different trajectory.

Florida’s metro regions reveal even more pronounced differences. Some areas have seen steeper rent declines, while even the state’s more stable markets are feeling the effects of increased supply pressures.

These regional numbers suggest varying market behaviors across Florida’s cities, driven by local supply and demand dynamics.

New Construction Impact on Rental Supply

Florida’s rental market has been reshaped by a surge in new construction, contributing to higher vacancy rates and putting downward pressure on rents. Over the past two years, more than 50,000 new rental units have been added statewide, with Miami alone accounting for nearly 20,000 of these units. This rapid expansion has left the market grappling with an oversupply.

In 2024, Tampa added approximately 12,500 multifamily units, while Miami-Dade County had around 25,000 units under construction by Q3 2024, increasing the total inventory by 19% [1][2]. However, Tampa saw a significant slowdown in new projects, breaking ground on fewer than 350 units in Q4 2024, marking its lowest quarterly total in nine years [1]. The construction pipeline in Tampa has contracted by nearly 40% compared to the previous year [1].

Looking ahead, Tampa’s development pace is expected to decelerate further. As of early 2025, 11,000 units remain under construction, with projections of only 7,400 units completing in 2025 and 3,500 in 2026 [1]. This slowdown reflects developers’ response to market conditions.

Additionally, there’s a clear shift in focus from luxury developments to affordable and workforce housing, where demand remains steady. With rising vacancy rates, the market is struggling to absorb the influx of new units, and this pressure is likely to persist until demand aligns with the expanded supply. Developers are recalibrating their strategies, signaling an adjustment to the evolving rental landscape.

Major Florida Metro Area Rental Trends

Florida’s rental market presents a mixed picture when you zoom in on its major metropolitan areas. While some cities are grappling with falling rents and rising vacancies, others have managed to hold steady despite the broader market pressures.

Miami: Falling Rents and Rising Vacancies

Miami’s rental market is going through a noticeable shift. The median rent in the city dropped to $3,000 in May 2025, marking a 6.2% decline compared to the previous year. This comes after a period of rapid rent increases – over 35% between 2020 and 2022. The influx of new rental units has also pushed vacancy rates higher, with Miami hitting 7.8% in May 2025, the highest among Florida’s major metro areas.

Tampa and Orlando: Easing Demand and Oversupply

Tampa and Orlando are showing similar trends, though not as severe as Miami. In Tampa, the average rent fell to $2,100, a 5% drop, while Orlando’s median rent decreased by 4.3%, landing at $2,000 in May 2025. Both cities are also seeing higher vacancy rates – Tampa at 6.5% and Orlando at 6.2% – indicating an oversupply of rental units. These shifts come after years of rapid rent increases and reflect a broader market adjustment. In Orlando, the return to normal domestic travel patterns post-pandemic has also played a role in cooling rental demand.

Jacksonville and Cape Coral: Stability Amid Market Fluctuations

Smaller metro areas like Jacksonville and Cape Coral are standing out for their steady performance. Jacksonville’s median rent remained at $1,750 in May 2025, showing little to no change or a slight 1–2% increase compared to the previous year. Similarly, Cape Coral saw a modest uptick, with rents rising to $1,850, reflecting a 1–2% year-over-year gain. Jacksonville’s population growth – rising from 1,676,000 to 1,713,000 between 2022 and 2023 – and thriving industries like healthcare and logistics have supported stable rental demand. These areas continue to attract renters thanks to their relative affordability.

These smaller metros highlight a stark contrast to the adjustments happening in larger cities like Miami, Tampa, and Orlando.

These trends reveal how local factors like economic activity, new developments, and migration patterns shape rental markets differently across Florida. While cities like Miami, Tampa, and Orlando are recalibrating after periods of rapid growth, Jacksonville and Cape Coral remain steady, offering more predictable opportunities for renters and investors alike.

Economic and Legal Factors Affecting Florida Rentals

The rental market in Florida is being shaped by more than just the usual supply and demand trends. Broader economic and legal shifts are playing a significant role, influencing why some areas are experiencing cooling rental markets while others stay steady. Let’s dive deeper into the population changes, regulatory updates, and weather-related challenges impacting Florida’s rental market.

Population Growth and Migration Patterns

Florida’s population boom has slowed down considerably. Recent data highlights a marked decline in net migration compared to the surge seen during the pandemic. This shift is reshaping rental demand across the state.

Rising living costs and a smaller wave of Baby Boomers entering retirement are two key reasons behind this slowdown. Many people are leaving high-cost coastal areas for more affordable inland cities, where rents have dropped in previously expensive markets. For instance, cities like Miami and Tampa are seeing rent declines, while smaller metros like Jacksonville remain steady.

Interestingly, not all regions are following the same trend. Jacksonville stands out as an exception, with its metro area projected to grow at twice the national average through 2029^[3]. This steady population growth explains why Jacksonville’s rental market has remained resilient compared to other major Florida cities.

New Regulations and Compliance Requirements

Recent legislative reforms in Florida have brought changes to property insurance and building regulations. These updates are influencing operating costs and shaping investment strategies, presenting both challenges and opportunities for property owners.

On the bright side, Florida’s insurance market is showing signs of stabilization. Reports from January 2025 indicate continued improvement, with 2024 rate filings reflecting a slight downward trend for the first time in years. Thirty-two companies filed for zero percent increases, and at least 17 companies submitted rate decrease filings. Additionally, ten new insurance providers have entered Florida’s market since the reforms.

Mark Friedlander from the Insurance Information Institute shared an optimistic outlook:

“So we are definitely heading in the right direction. Florida’s market is stabilized, even with three landfalling hurricanes in Florida last year, Debby, Helene and Milton.”

New compliance measures include mandatory condominium milestone inspections, structural integrity reserve studies, and hurricane protection standards for homeowners’ associations. There are also new rules affecting landlords, including those related to roofing contracts, policy cancellations, and increased insurance company oversight. Programs like My Safe Florida Home have expanded to include more properties, offering windstorm mitigation benefits for eligible homes.

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Insurance Costs and Weather-Related Risks

Even with recent improvements, insurance remains a significant expense for Florida rental property owners. The average annual homeowners insurance cost in Florida is about $4,329 – well above the national average^[4]. Depending on the region, costs range from $1,700 to over $7,100 annually, with higher premiums in areas prone to severe weather^[4].

Florida’s vulnerability to hurricanes and floods is a major factor driving these costs. About 77% of the state’s residents live in high-risk zones^[4]. The increasing frequency and severity of storms continue to push premiums higher, especially in coastal areas^[4].

Another factor historically contributing to high insurance costs is Florida’s litigation environment, where excessive legal fees have driven up claims expenses. However, recent reforms have tackled these issues by repealing one-way attorney fee provisions and prohibiting assignments of benefits.

Despite these challenges, there are ways to manage insurance costs. Property owners can shop for better rates, invest in resilience-boosting home improvements, opt for higher deductibles, and take advantage of windstorm mitigation discounts^[4]. Programs encouraging windstorm mitigation have gained traction, helping property owners lower their insurance expenses.

Brian Chapman, CEO of Chapman Insurance Group, expressed confidence in the market’s recovery:

“We have recovered. And I would say that unequivocally. There’s no bashful shyness about this, like, maybe we have, maybe we haven’t. No, we recovered six months ago. And the last six months has been an absolute downward trend.”

These economic and regulatory developments create a complex but improving landscape for Florida’s rental property investors. While population growth is slowing and new compliance rules are emerging, a stabilizing insurance market offers a more predictable environment for property owners.

Investment Approaches for Q2 2025 Market Conditions

Florida’s rental market in Q2 2025 presents a patchwork of opportunities and challenges, with regional differences shaping investment strategies. To navigate these dynamics effectively, focusing on stable markets and managing risks is essential.

Focus on Stable Rental Markets

Not all Florida markets are created equal. Jacksonville and Cape Coral have emerged as two of the most resilient rental markets in the state. In Jacksonville, the median rent held steady at $1,750 in May 2025. Despite a 61% drop in new multifamily construction starts in 2024, demand has remained strong, with occupancy rates at 93.4%. Looking ahead, rent growth in Jacksonville is projected to reach 3% by late 2025. Meanwhile, Cape Coral offers another dependable option, with median rents climbing to $1,850 in May 2025. These markets strike a balance between risk and consistent cash flow, unlike some larger metropolitan areas experiencing declines.

Chris Stroud, Chief of Research at HouseCanary, commented on the broader market environment:

“Most markets are trending at multiyear lows in terms of overall listing activity; both in terms of new listings as well as the number of listings going into contract. Mountain West states and Florida are expected to have robust listing activity through the end of the year. However, the elevated listing activity in these regions is also leading to elevated inventory, putting increasing pressure on price growth.”

For investors, understanding the nuances of local markets like Jacksonville and Cape Coral is critical to achieving solid returns in these conditions.

Managing Regulatory and Insurance Cost Risks

The insurance landscape in Florida is shifting, and managing these costs is more important than ever. Investors should take a proactive approach by:

• Regularly reviewing insurance coverage with agents.
• Making hurricane-resistant upgrades to qualify for premium discounts.
• Exploring group policies for multiple properties.
• Comparing rates to take advantage of increased competition among insurers.

Additionally, setting up contingency funds can provide a financial cushion to handle unexpected cost fluctuations during this period of adjustment. Partnering with local experts can also help navigate these challenges effectively.

Working with Hampton Real Estate Advisors, LLC

Hampton Real Estate Advisors, LLC offers the expertise needed to tackle Florida’s evolving rental market. Their services focus on stable submarkets like Jacksonville and Cape Coral, providing tailored market analysis, access to trusted insurance vendors, and strategies for regulatory compliance.

Through their in-house underwriting capabilities and ongoing property management support, Hampton Real Estate Advisors help investors mitigate risks while identifying opportunities. They also offer educational resources to adapt to changing market conditions. By combining deep local knowledge, a network of reliable vendors, and customized strategies, the firm positions investors for success in Florida’s complex rental landscape.

Conclusion: Q2 2025 Florida Rental Market Summary

Market Performance Summary

Florida’s rental market in Q2 2025 paints a mixed picture. Statewide, the median rent slipped from $2,125 in March to $2,090 in May, signaling a cooling trend in major metropolitan areas. Larger cities like Miami, Tampa, and Orlando experienced noticeable rent declines, while smaller markets like Jacksonville and Cape Coral held steady or even saw slight growth.

Vacancy rates also reflect this shift. By May 2025, Florida’s overall multifamily vacancy rate rose to 6.9%, up from 5.8% a year earlier. Miami’s vacancy rate hit 7.8%, while Tampa and Orlando stood at 6.5% and 6.2%, respectively. On the flip side, Jacksonville’s median rent remained stable at $1,750, and Cape Coral saw rents climb modestly to $1,850, with both areas posting 1–2% year-over-year increases.

This evolving market landscape calls for a recalibration of investment strategies.

Investor Action Steps

To navigate these changes, investors should focus on diversification and stability. Markets like Jacksonville and Cape Coral, which continue to show steady performance, offer lower cash flow risks and more reliable returns. These submarkets provide a safer bet in a softening environment.

Expense management is another key priority. Streamlining operating costs and identifying opportunities to enhance property value can help maintain profitability. At the same time, staying compliant with regulatory requirements and ensuring adequate insurance coverage are essential steps to manage operational risks. In Florida, this includes securing insurance that accounts for potential weather-related challenges, which remain a significant concern [5].

For a long-term strategy, targeting stable markets, controlling costs, and mitigating risks are vital. Partnering with experienced local advisors, such as Hampton Real Estate Advisors, LLC, can provide critical insights, access to vetted vendor networks, and guidance on compliance. This kind of collaboration can help investors adapt effectively to shifting market conditions.

Florida’s rental market may be rebalancing, but for those who adjust their strategies wisely, opportunities still abound – even as the broader market continues to find its footing amid changing supply and demand dynamics.