Newly signed contracts for single-family homes and condos dropped throughout South Florida despite an increase in new listings, signaling a cooling market influenced by rising interest rates and affordability issues.

Despite an increase in property listings in June, newly signed contracts for single-family homes and condos have declined across major counties across South Florida, indicating a cooling market driven by rising interest rates, inflation, and housing affordability issues, according to a new real estate report.

Newly signed contracts for single-family homes and condos dropped across Palm Beach, Miami-Dade, and Broward, despite an increase in new listings. The report indicated that the trend is a signifier a cooling market.

New contracts in June decreased by 21.3 percent in Palm Beach County, 17.0 percent in Miami-Dade County, and 6.5 percent in Broward County for single-family homes. The condo market has experienced even sharper declines, with a 33.3 percent decrease in Palm Beach, 26.8 percent in Miami-Dade, and 31.7 percent in Broward during the same time period.

Factors such as rising interest rates, inflation, and housing affordability issues are likely contributing to this trend, the report suggests, in addition to speculation that an increased cost of mortgages is deterring potential buyers, while the rapid rise in home prices over the past few years has made homeownership less attainable for many, particularly first-time buyers.

While most price segments have seen declines, the high-end market showed sustainability. In Palm Beach County, contracts in the $5 million to $9.99 million and above $10 million segments saw sharp increases, by 80 percent and 150 percent, respectively. The trend may suggest that the luxury market’s resilience may be driven by affluent buyers who are less sensitive to broader economic shifts and continue to invest in high-value properties.

The rise in new listings across the trio of counties exemplifies a growing inventory, which could be a response to anticipated market softening. In Palm Beach, new listings rose by 17.5 percent for single-family homes and 23.2 percent for condos. Miami-Dade has seen an 18.3 percent increase in single-family home listings and a 33.8 percent increase in condo listings. Meanwhile, Broward County reported a 29.7 percent increase in new listings for single-family homes and a 36.2 percent increase for condos.

The report also notes regional variations, as Miami-Dade County’s condo market shows an uptick in listings, while Broward County’s single-family home market is similarly characterized by increased inventory.

Looking ahead, Florida’s real estate market is prone to a cooling period characterized by slower price growth or potential price declines. Any potential market corrections could lead to more stable home prices, making it easier for buyers to enter the market.

Sellers, however, may need to adjust their expectations and strategies, focusing on realistic pricing and property enhancements to attract buyers.