Tampa is posting the fastest luxury home price growth of any city in the nation, according to a new report from Redfin, revealing a widening gap between the region’s high-end housing market and the rest of the market.

Redfin found that luxury home prices nationwide rose 4.7% year over year in May, compared with just a 1.5% increase for non-luxury homes. The brokerage attributes the trend to affluent buyers who remain active despite elevated mortgage rates and economic uncertainty, since they are typically less sensitive to borrowing costs and often pay in cash or with large down payments.

Florida dominated the national rankings. Tampa recorded the fastest luxury home price growth in the country, with Miami close behind.

Along Pinellas County’s Gulf beaches, the demand is evident to industry professionals. Joe Ebanks, a luxury homeowner and developer in Redington Beach, said waterfront living, Florida’s lack of a state income tax, and a shrinking supply of beachfront land continue to draw wealthy buyers to the area.

Ebanks said buyers of multimillion-dollar homes are largely shielded from today’s higher interest rates because most pay cash or put down substantial sums upfront. He also said the market shifted after Hurricanes Helene and Milton, as updated FEMA rebuilding requirements and stricter building standards pushed some longtime homeowners to sell flood-damaged properties rather than rebuild. With buildable lots scarce along the 27-mile stretch of beach, he said, more luxury development has followed.

In St. Petersburg, developer and house flipper Bruzensky Bois said the luxury market tells only part of the story. He said Tampa Bay’s appeal, mild weather, and lower cost compared with Miami are drawing buyers to the high end of the market, but many working families are still struggling due to a shortage of “missing middle” housing — duplexes, quadplexes, and other moderately priced options that could make the area more affordable for average earners.

Redfin’s report notes that while luxury homes continue to appreciate rapidly, the broader housing market is moving much more slowly, a divide that underscores the affordability pressures facing many buyers as borrowing costs remain elevated.

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