Florida Keys Mortgage Market Update: September 2026

The 30-year fixed mortgage rate averaged 6.71% in the first week of September 2026, up slightly from 6.66% the week before, while Keys home prices continue to appreciate at very different paces depending on the island. Monroe County values are up roughly 12% year-over-year overall, but the Upper Keys are seeing slower growth than they did in 2025. Here is what buyers, sellers, and homeowners need to know about rates, prices, and inventory this month across the Florida Keys.

Mortgage Rates in Early September 2026

The 30-year fixed-rate mortgage averaged 6.71% for the week of September 3, 2026, according to Freddie Mac's Primary Mortgage Market Survey, up from 6.66% the prior week. The 15-year fixed rate averaged 6.04%. Rates have drifted higher through the spring and summer: they averaged 6.30% in late April, 6.37% in early May, 6.55% in mid-July, and 6.58% in late July before climbing to current levels.

Rates have now given up nearly all the ground they gained earlier this year, when the 30-year briefly touched 6.30%. The movement has been gradual rather than sudden, which is easier to manage from a budgeting standpoint than the swings of 2022 and 2023. To put it in dollars: on an $800,000 loan, the difference between 6.55% and 6.71% is roughly $80 per month. Not pleasant, but not a deal-breaker for most qualified buyers.

Here is where rates are landing by program for Keys borrowers:

• Conventional loans (30-year fixed): 6.6% to 6.95% depending on credit score and down payment
• FHA loans: 6.15% to 6.45%, the common choice for buyers putting 3.5% down
• VA loans: 6.2% to 6.4%, still the lowest-cost option for eligible veterans
• Jumbo loans: 6.8% to 7.3% for most Keys properties above the conforming limit
• DSCR loans (investment): 6.5% to 8%, with the best pricing above 740 credit and strong rental coverage

Key Largo Market

Key Largo's median sale price sits near $950,000 as of late summer 2026, up roughly 4.5% to 12% year-over-year depending on the data source and home type. The headline is the slowdown in the pace: after the sharp appreciation of 2024 and 2025, Key Largo pricing is normalizing. Homes are still selling, but overpriced listings sit longer, and buyers have more negotiating room than a year ago.

Key sub-markets within Key Largo continue to behave differently:

• Ocean Reef: The gated community remains its own market, with homes from $2 million into the tens of millions and little turnover from long-term owners.
• Canal-front and bayfront: Canal-front homes start around $1.2 million, with deep-water access commanding a meaningful premium. Bayfront and oceanfront homes run from $1.5 million into the millions.
• Non-waterfront: Entry-level single-family homes start near $550,000 for living in the Keys without a private dock, a growing value play as waterfront costs climb.

Active inventory in Key Largo is roughly flat to slightly up, which gives buyers a more normal experience: time to tour, time to inspect, and time to negotiate. Well-priced canal-front homes still sell within their first few weeks on the market.

Islamorada Market

Islamorada continued to show the widest price swings in the Upper Keys. Median sale prices are holding near $1.4 million, up more than 50% year-over-year in some measures, but much of that is the mix of high-end sales rather than across-the-board appreciation. Median price per square foot sits near the $600 mark, a reminder of how expensive waterfront property is on the Atlantic side.

Sales volume here is thin by design: Islamorada is spread across six islands, and only a relative handful of properties trade each month. That makes pricing from recent sales choppy, so buyers should rely on true comparable sales rather than headline averages. Oceanfront and ocean-adjacent homes drive the demand, while non-waterfront homes offer the most reasonable entry points in the village.

Marathon and Duck Key Market

Marathon's median sale price is near $1 million over the trailing three months, up more than 40% year-over-year in the most recent measures, with median price per square foot around $660. Days on market have shortened a bit from a year ago, and open-water homes remain the most active segment.

Duck Key continues to operate as its own sub-market within the Marathon area, driven by the gated island experience and central location. Buyers there typically split between second-home owners and vacation rental investors, which makes both insurance costs and DSCR financing central to the conversation. The rental-season assumptions matter a lot here, so I work through realistic occupancy and revenue numbers before anyone writes an offer.

Key West Market

Key West remains the most active market in the Keys. Median home values sit in the $1.2 to $1.3 million range, and median list prices are near $1.19 million, off from the early-year peak but still above year-ago levels. Sales are driven by full-time residents, second-home buyers, and investors, with a meaningful share of transactions coming from 1031 exchanges at the top of the market.

Inventory is modestly healthier than 2025, but it skews toward condominiums and smaller properties. Old Town historic homes still carry the most financing nuance: many are older, non-conforming structures on small lots, and some lack off-street parking. Lending on these usually requires a lender experienced with the city's regulations and the appraisal challenges of a historic district, where price per square foot can be the highest in Florida.

For condo buyers in Key West, the post-Surfside structural work is now fully embedded in market behavior. Associations that have completed their milestone inspections and funded their Structural Integrity Reserve Studies are selling well; buildings still working through repairs see units sit. That gap is a buyer's due-diligence checklist item, not an afterthought.

Lower Keys Market

The Lower Keys, including Big Pine Key, Summerland Key, Cudjoe Key, and Stock Island, continue to offer the most attainable price points in Monroe County. The National Key Deer Refuge limits development on Big Pine, and the county's tiering rules keep density low across most of the unincorporated Lower Keys, which is exactly what preserves the character and the relative value.

Inventory is thin but so is the buyer pool, so homes move at a slower, more deliberate pace. Canal-front and bayfront properties run meaningfully below comparable homes in Key Largo or Islamorada, which keeps drawing budget-conscious buyers who still want their own dock. Stock Island, closer to the Key West market, offers proximity without the same price per square foot, which makes it worth a close look.

Inventory Trends Across the Keys

Monroe County had roughly 2,000 active listings through the end of summer 2026, up modestly from 2025 but still low for a market this large and this desirable. The geography does the heavy lifting: there is no new land to develop single-family neighborhoods at scale, building costs stay elevated, and the building codes are among the strictest in the country.

Except in the condo market, where inventory has improved as associations work through their Structural Integrity Reserve Study obligations. Effective 2026, Florida budgets must fully fund structural reserves, and unit owners can no longer vote to waive them. That is good for fundamentals, but it is also raising HOA dues in many buildings. For a buyer, the association's finances are now as important as the unit itself.

Hurricane Season and Insurance in September

September is the historical peak of Atlantic hurricane season, and the 2026 forecasts are modestly encouraging. NOAA's August outlook called for a 75% chance of a below-normal season, with 7 to 13 named storms, 2 to 6 hurricanes, and 0 to 2 major hurricanes, as an expected El Nino dampens activity. That does not eliminate risk: it only takes one storm to change lives, as every Keys resident knows. If you are under contract right now, do not delay your wind and flood policies until after closing.

Insurance remains the single biggest difference between a Keys payment and a mainland payment. A typical elevated single-family property carries combined wind, flood, and hazard premiums of $15,000 to $25,000 a year, and waterfront homes sit at the top of that range. What to do:

• Get wind and flood quotes during the inspection period, not after close, so no surprises hit your first bill.
• Confirm the lender's escrow will cover both policies; in a flood zone, most loans will not close without written flood coverage in place.
• Check whether the home qualifies for wind mitigation credits, since wind insurance costs vary by a lot with the age and construction of the roof.
• Remember the Citizens flood phase-in: the mandate already applies to larger policies and reaches all Citizens vehicles on January 1, 2027.

For the deeper breakdown, see the flood insurance guide and the wind insurance guide for the Florida Keys.

How the September Market Affects Your Strategy

Get Pre-Approved Before You Tour

With Monroe County's conforming loan limit at $990,150, a large share of Keys sales need jumbo financing above it. Jumbo loans carry higher standards: 20% to 30% down for many waterfront purchases, larger cash reserves, and strong credit. Know your loan amount before you write an offer, and you never fall in love with a property you cannot finance.

Factor Insurance Into Your Payment

The rate is only half the story. At 6.71% on a $950,000 purchase with 20% down, principal and interest runs near $6,000 a month. Insurance adds $1,200 to $2,000 a month and taxes another $900 to $1,500. Your total housing cost is what your qualification and your household budget run on, so use realistic numbers from the start and never a payment you saw on a portal that forgot the insurance.

Compare Programs and Consider a Lock

With rates drifting up and the 30-year at 6.71%, program selection matters more than it did a year ago:

• Conventional loans from 5% down for a primary residence, and 10% to a quarter for second homes and investment properties.
• FHA loans for first-time buyers and those with thinner credit, though the Keys' price structure keeps many FHA purchases in the smaller price range.
• VA loans remain the best deal for veterans, with zero down and the lowest rates.
• Jumbo loans for most waterfront purchases above the conforming limit.
• DSCR loans for investors qualified against rental income, not salary.
• Non-QM and bank statement loans for self-employed borrowers who cannot document income with a traditional W-2 and 1040.

If you have a contract, ask your lender about a long lock period and whether a float-down is available in case pricing improves before closing.

Watch the Appraisal

Where prices have run up fastest, appraisals can trail the contract. Keep an appraisal contingency in the purchase contract and price realistically against recent closed sales. The Keys appraisal guide covers the quirks in detail: waterfront valuation, FEMA zones, and older non-conforming structures all behave differently than on the mainland.

Looking Ahead to Late 2026

Forecasters expect the 30-year fixed rate to sit in the mid-6% to 7% range through the end of 2026. Nothing on the horizon suggests a sharp drop or a big jump. Keys prices, meanwhile, will keep leaning on the fundamentals: limited geography, strict building codes, damaged insurance that hits every homeowner equally, and steady demand from buyers who want the water.

For homeowners, the rate environment is not favorable for a rate-and-term refinance unless you carry a loan from the 2023 peak. Cash-out refinancing can still make sense for owners with serious equity who need funds for repairs, retirement, or a next purchase.

As always, the mortgage calculator on this site lets you model a payment with Keys-specific insurance and taxes so you know your real number, not a national average.

Frequently Asked Questions

Ready to Plan Your Keys Purchase?

Every Keys sub-market has its own rhythm, and every buyer's situation is different. Whether you are shopping for a first home in Key Largo, a second home in Islamorada, a condominium in Key West, or a vacation rental in Marathon, I can turn this month's rates and prices into a realistic purchase plan.

I work with Keys buyers across every loan type: conventional, FHA, VA, jumbo, DSCR, and non-QM. If you are starting your search or have a contract, let us run the numbers together.

Get Pre-Approved