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  • The Fed Raised Rates 12–0. Florida’s Million-Dollar Home Sales Were Already Up 8.8%.

    The Fed Raised Rates 12–0. Florida’s Million-Dollar Home Sales Were Already Up 8.8%.

    Graphic reading +8.8%: Florida's $1 million-and-up existing single-family home sales in August 2026, year over year, against a 1.4% decline in all closings statewide, over a stylized city skyline at dusk.

    Statewide closings fell in August for the first time in a year, and Florida Realtors’ own economist blames rates. Above $1 million, they grew. And the Lennar region that includes Florida took the company’s steepest drop in new orders.

    FL Real Estate Insider — Week of September 21, 2026
    By Luis Noronha

    12–0. That was the vote on Wednesday, September 16, when the Federal Open Market Committee raised the federal funds rate by a quarter point, to a range of 3.75% to 4.00%. (Federal Reserve — FOMC statement, September 16, 2026)

    In July, three members wanted this hike and lost. In September, nobody dissented. (FOMC statement, July 29, 2026)

    In August I wrote that the July statement was “not a committee looking for a reason to cut”. Seven weeks after that July meeting, it raised.

    The same day, Florida Realtors published its August numbers and Lennar reported its quarter, with the earnings call the next morning. Read together — my assessment, not theirs — the three releases test what this newsletter has argued since August. Not all of it held.

    The Fed’s own projections took a 2026 cut off the table

    The decision was a quarter point. The projections are the bigger news.

    The Fed’s Summary of Economic Projections asks each of the 18 participants where the policy rate should sit at year-end. The median answer for 2026 was 3.4% in March, 3.8% in June, and 4.1% on September 16. For 2027 it jumped from 3.6% to 4.1%. (Federal Reserve — SEP, September 16, 2026; June 17; March 18)

    The arithmetic worth doing yourself: the new range has a midpoint of 3.875%. One more quarter point, to 4.00%–4.25%, has a midpoint of 4.125%. A 4.1% median is one more hike across the two meetings left this year, October 27–28 and December 8–9. And the lowest of the 2026 projections is 3.9% — the rate where it now sits.

    Not one participant projects a lower rate by December.

    Chairman Kevin Warsh, at the press conference:

    “I would be hard-pressed to describe broad financial conditions as restrictive. This view was widely shared by the Committee. So we removed a dose of accommodation.” (Federal Reserve — press conference transcript, preliminary, September 16, 2026)

    The same projections put PCE inflation at 3.7% for 2026 and do not reach 2.0% until 2029.

    The mortgage market got there first

    Freddie Mac’s 30-year fixed averaged 6.95% in the week ending September 17 — up from 6.76% the week before and 6.26% a year ago. (Freddie Mac PMMS) In Freddie’s own history file, that is the highest weekly reading since January 2025.

    A scope note, because it changes what the number means: the survey covers Thursday through Wednesday, and six of those seven days closed before the 2:00 p.m. announcement. My read is that the 6.95% mostly reflects the market pricing the hike in advance, not reacting to it.

    Florida’s August: the statewide number went the wrong way

    I’d rather put this first than have you find it.

    Closed sales of existing single-family homes in Florida totaled 21,497 in August, down 1.4% from a year earlier. That ended a run of 11 consecutive months of year-over-year gains. The median held up — $415,000, up 1.2% — on 4.3 months of supply. (Florida Realtors, September 16, 2026)

    Dr. Brad O’Connor, Florida Realtors’ chief economist, was direct about the cause:

    “…on the margin, the recent rise in rates has been enough to slow home sales growth, and the affordability constraints induced by elevated mortgage rates are likely going to be with us for the foreseeable future.”

    And the detail that hurts my own recent argument most: statewide single-family cash sales fell 2.1% — faster than sales overall — to 5,782, and the cash share slipped from 27.1% to 26.9%. (Florida Realtors — August 2026 single-family data detail (PDF))

    Two weeks ago I wrote about Florida’s 41.3% all-cash share and argued that for the cash-heavy end buyer, the Fed is a second-tier variable. That was Realtor.com’s deed data for the first four months of the year; this is Florida Realtors’ MLS data for one month, and the two are not one series. But if the argument were that Florida’s cash buyers carry the whole state through rising rates, August doesn’t support it.

    Here’s the split the statewide headline hides

    The statewide release doesn’t show it. Page 8 of the same PDF does.

    • $1 million and up: 2,087 closings, up 8.8%.
    • $1.5 million to $2 million: up 25.3%. $2 million to $3 million: up 22.9%.
    • $300,000 to $399,999 — the state’s largest single band: 5,443 closings, down 6.1%.

    Everything under $1 million, taken together, fell about 2.4%. That is my arithmetic, not Florida Realtors’: 21,497 total minus 2,087 at $1 million-plus leaves 19,410, against roughly 19,880 a year earlier (21,798 total, less about 1,918 at $1 million-plus, backed out of the 8.8% growth rate).

    Three limits, and each one matters. This is one month. It is existing homes only — it says nothing directly about new construction. And Florida Realtors does not publish a cash share by price tier, so I cannot tell you how many of those 2,087 buyers skipped the lender. I won’t imply it.

    So the Florida market did not weaken evenly in August. My interpretation of why: it weakened where buyers finance and grew where they have the most balance sheet — the pattern the June issue on the Florida luxury buyer described, now visible in a statewide table. Whether that top-tier strength was cash-funded, this data can’t tell me — which is why I’m not scoring the September 9 argument on it.

    What one of the nation’s leading homebuilders said about the middle

    Lennar’s quarter ended August 31. Earnings were $1.19 a share, against $2.29 a year earlier. The average delivered home sold for $372,000, “reflecting approximately 12.0% in incentives, along with base price adjustments.” Gross margin on home sales fell to 15.8% from 17.5%. New orders fell 9%, and the company cut its full-year delivery target to 80,000–81,000 homes from 82,000–83,000. (Lennar — Q3 2026 results, September 16, 2026)

    Lennar reports Florida inside an “East” segment that also includes New Jersey and Pennsylvania, so Florida can’t be isolated. But East new orders were 4,831 against 5,792 a year earlier — down 16.6%, the steepest decline of Lennar’s four regions.

    In my reading, Stuart Miller made my August argument more bluntly than I did:

    “The Federal Reserve’s assistance is clearly off the table for practical purposes and not a near-term source of relief… Rate cuts when they eventually come, will be a meaningful tailwind for our business, but we are not holding our breath… we are not building our business plan around those rate cuts.” (Lennar Q3 2026 earnings call, via The Motley Fool transcript, September 17, 2026)

    He named the competitor, too: resale sellers, with listings “particularly high” in Texas and Florida, “especially at our price range.” On cost, labor “has started to become more of an issue,” citing immigration enforcement — a pressure I wrote about in June’s issue on Florida construction labor enforcement — and competition from data-center construction.

    Lennar’s $372,000 national average falls in Florida’s largest price band, where closings fell 6.1%. My read, marked as opinion: the pressure from rising rates is concentrated where a builder paying about 12% in incentives and a resale seller cutting price are fighting over the same qualified, financed buyer — a fight the top of the market isn’t in.

    From the Developer’s Seat

    From here on I’m arguing, not reporting — the conclusions are mine, drawn from the evidence above.

    The Fed’s own projections show no cut this year, and Lennar’s CEO says the company isn’t building its plan around one; my conclusion, unchanged since August, is that nobody should underwrite a Florida project on the promise of rate relief. Where I’d sharpen my September argument: August’s strength came from the top of the price range, not from cash carrying the state — and in my experience the buyer there is often weighing an older resale house against a code-current new build, the choice I build for. That’s where patient, low-leverage capital has its edge: it doesn’t need the Fed to carry the project, and it builds for a buyer with the balance sheet to close whatever the Fed does. So, a question for anyone allocating here: roughly what share of your Florida exposure depends on a buyer who needs a 7% mortgage to close?

    If you want to see how I stress-test rate and end-buyer assumptions in live underwriting, that’s what the Lana Investor Memo is for.

    → Request access at coastal-living-collection.com (accredited investors only).

    Until next week,
    Luis

    Sources

  • The Fed Held Rates Last Week — and Three Officials Voted to Raise Them. Not One Voted to Cut.

    In March, the median FOMC participant projected a lower policy rate by year-end. By June, the median projected a higher one. Last Wednesday three of them formally dissented in favor of hiking. Mortgage rates are higher now than when they voted. If your Florida decision is parked waiting for rate relief, that is your answer.

    FL Real Estate Insider — August 3, 2026
    By Luis Noronha

    On July 29 the FOMC held its target range at 3.50%–3.75%. The vote was 9–3, and all three dissenters — Beth M. Hammack, Neel Kashkari and Lorie K. Logan — “preferred to raise the target range for the federal funds rate by 1/4 percentage point at this meeting.” (Federal Reserve — FOMC statement, July 29, 2026)

    Read that again. Not one official dissented for a cut. Three dissented for a hike.

    None of it should have been a surprise. The document that said so came out on June 17, and I’ve seen almost no coverage of it in this industry.

    Start with the scoreboard, not the forecast

    Here is what Freddie Mac’s 30-year fixed average did across 2026:

    → January 15: 6.06%
    → February 26: 5.98% — the low of the year
    → July 30: 6.66% — the high of the year, and the most recent print

    (Freddie Mac — PMMS; historical archive)

    Seven months into a year I expected to bring relief, the 30-year sits 68 basis points above its February low. Not lower. Higher. And rates are higher now than when the Fed met: Mortgage News Daily’s daily index closed at 6.82% on August 3, up from 6.78% on decision day and within three basis points of its 52-week high. (Mortgage News Daily)

    The number that cuts against me, before you find it yourself: rates are still below where they were a year ago, when the 30-year averaged 6.72%. (Freddie Mac) Rates didn’t explode. The 2026 rally reversed, and the direction of travel for five straight months has been up.

    The Fed’s own projections flipped from a cut to a hike

    Four times a year, FOMC participants publish where they think the federal funds rate should be. Compare two rounds three months apart: the median projection for the end of 2026 was 3.4% in March and 3.8% in June. (Federal Reserve — Summary of Economic Projections, June 17, 2026)

    The midpoint of the current range is roughly 3.6%. So in March, the median participant wanted a cut by year-end. By June, the median wanted a hike. Across the eighteen participants, year-end estimates ran from 3.4% all the way to 4.4%.

    The minutes put the split in the Committee’s own words: “Many participants indicated that the appropriate level of the federal funds rate would be within or slightly below the current target range at the end of this year. Many other participants, however, assessed that the appropriate level of the federal funds rate would be above the current target range at the end of this year.” (June 2026 FOMC minutes)

    What moved them sits in the same document: the median 2026 PCE inflation projection was revised from 2.7% in March to 3.6% in June. (June 2026 SEP) The statement still describes inflation as “elevated relative to the Committee’s 2 percent goal,” against an economy “expanding at a solid pace.” (FOMC statement)

    That is not a committee looking for a reason to cut. The next meeting carrying fresh projections is September 15–16 — and in my experience that lands after most of a Florida year’s contracts are already signed.

    Meanwhile, Florida kept transacting

    In June the state closed 26,036 single-family sales, up 9.3% year over year, at a median of $432,000, up 4.9% — the tenth consecutive month of growth, on 4.5 months of supply. (Florida Realtors, July 17, 2026) Those sales closed into a market where Freddie Mac’s 30-year ran between 6.47% and 6.52% every week of the month. Not 5.5%. Not after a cut.

    Here’s the number I’d put in front of anyone who builds. While demand posted its tenth straight month of growth, new supply was being permitted more slowly: Florida authorized 9,943 single-family units by building permit in June against 10,442 a year earlier — down 4.8% — and 56,060 through the first half against 59,631. (U.S. Census Bureau, series FLBP1FH via FRED)

    Rising absorption into contracting new supply. That happened without a single rate cut.

    The honest counterweight: somebody is paying for that

    Builder sentiment is genuinely weak. The NAHB/Wells Fargo index registered 34 in July, its fifteenth straight month below 40 — and 63% of builders used sales incentives while 37% cut prices outright, averaging 6%. (NAHB, July 2026)

    The incentive I’d watch is the permanent rate buydown, and it is not free. Lennar reported Q1 2026 sales incentives at roughly 14% of sales price, against a historical average of 4% to 6% — and grew new orders 1% year over year anyway, to 18,515 homes. (Lennar — Form 10-Q, quarter ended February 28, 2026)

    Marking this as my view rather than a finding: it works, and it’s a subsidy with a limit, and the limit is whoever’s margin is funding it. The question isn’t who’s offering a buydown — it’s who can fund one for another eighteen months without taking it out of the house. That describes builders selling to financed buyers. It is not a claim that the dynamic has reached the cash tier.

    The buyers who never opened a rate sheet

    This is the part that matters most to the capital this newsletter serves, and I’ll stay on one reference for all of it — sales above $1 million.

    82% of Miami-Dade $1 million-and-up condo sales closed all-cash in 2025, against a national all-price share of roughly 25%. (MIAMI REALTORS®, July 2026) Four in five transactions in that tier of the Miami-Dade condo market never touch a lender. That figure is the condo slice — no matching cash share is published for million-dollar single-family, which was about three-quarters of last quarter’s volume.

    And the tier grew while rates climbed. In the second quarter, $1 million-plus transactions across Miami-Dade, Broward, Palm Beach, the Treasure Coast and Southwest Florida rose 20.1% to 8,013 single-family sales and 23.5% to 2,590 condos. Miami-Dade is not the center of gravity: Southwest Florida leads on volume — 2,880 single-family, 869 condos — and among individual counties Palm Beach leads at 2,534, against Miami-Dade’s 1,000. (Keyes/Illustrated Luxury Market Report, Q2 2026, via RISMedia) In June, Miami-Dade’s million-dollar sales rose 29.14%, from 374 to 483. (MIAMI REALTORS®)

    Two things cut against the easy read of that. The Treasure Coast went the other way — million-dollar single-family sales down 6.5%, condos down 16.9%. And the average luxury condo price rose just 0.3% on that 23.5% volume gain: the same shape the statewide condo tape showed in June — sales up 14% on a median price up 1.7% — now visible at the top of the market too. (Keyes/Illustrated via RISMedia)

    So: consistent with the case I made in June’s Florida Luxury Buyer issue, not proof of it. The 82% is a 2025 reading, and one quarter of volume growth in one region is a data point, not a trend.

    From the Developer’s Seat

    What follows is my opinion, not statute and not data — I want to mark that clearly.

    Waiting has stopped being free: “when rates come down” is not a plan, it’s a leveraged bet on one macro variable that three of the people who set it just voted to move the other way. In the financed tier, the surviving edge is a margin thick enough to fund a buydown for another eighteen months without taking it out of the build; in the tier this newsletter is written for, the edge is an end buyer who never needed the financing at all. Disciplined, developer-led, ground-up Florida new construction sold to that second buyer doesn’t need the Fed to cooperate — it needs the basis to be right, the house to be right, and the sponsor still standing in month nineteen. Rising absorption into contracting new supply is the condition that rewards exactly that, and it showed up this year without a single rate cut. That is why Lana’s underwriting was never a rate-cut bet, and why a split Fed is, for us, a non-event.

    So I’ll put the question to you: are you underwriting your next Florida decision on a rate assumption, or on a basis that works at 6.5% and at 7.5%? I read every reply.

    If you want to see how that shows up in live underwriting — the actual rate assumptions, the actual incentive budget, the actual end-buyer profile — that’s exactly the conversation the Lana Investor Memo is built for.

    → Request access at coastal-living-collection.com (accredited investors only).

    And if you know someone who’s been sitting on a Florida decision waiting for a cut, forward this to them. That’s the person this issue was written for.

    Until next week,
    Luis

    Sources