Florida has overtaken New York to become the second most-valuable US housing market, according to a new study by Zillow.

The total value of US housing rose more than $2.6 trillion in the past year, Zillow said, defying predictions that higher borrowing costs would lead to a prolonged slump. Low levels of supply, enhanced by the lock-in effect — which has left current mortgage borrowers reluctant to give up their low-cost loans — have pushed nationwide prices to a new high.

The gains haven’t been evenly spread across the country. In California, which contains about one-fifth of the US housing market, prices have declined since June 2022. But in Florida, the value of residential property has risen $160 billion in that period — pushing the Sunshine State ahead of New York in the national rankings.

“Despite the presence of higher mortgage rates, which deterred some home shoppers and kept many existing homeowners on the sidelines, enough buyers remained to keep the market moving,” wrote Orphe Divounguy, a senior economist at Zillow.

The real estate boom in Florida means that Miami has surged up the rankings to become the fifth-largest metropolitan housing market — climbing from the ninth spot in May 2021, and overtaking the nation’s capital Washington DC among others.

Most Valuable Markets | In 8 US metro areas, the housing stock exceeds a $1 trillion valuation
Miami home values are up more than 80% since the start of the pandemic, and so are properties in Tampa and Jacksonville, while Orlando has seen an increase of more than 70%. Substantial population growth in the state is one reason why Florida prices have climbed so fast, according to Zillow. 

This article was provided by Bloomberg News.