Tennessee 2024 real estate forecast: What homebuyers should know
[ad_1]
The price of a home in Tennessee has doubled since early 2020, dimming the prospect of homeownership considerably for Nashville residents earning the median income of $71,328.
Is there hope for a more balanced market in which incomes and home prices align?
“In the third quarter of 2023, the economic situation in Tennessee was characterized by a mix of both positive and negative elements,” according to Middle Tennessee State University’s Business and Economic Research Center quarterly Housing Report.
“The real estate sector faced certain challenges. The Homeowner Vacancy Rate and Mortgages Past Due saw increases of 0.40 and 0.04 percentage points, respectively, indicating potential difficulties in these areas,” the report states.
As a new year opens with analyst expectations of a slowing national economy and reduced mortgage rates, Tennessee housing prices are still on the rise. But the rate of increase varies dramatically by county.
Nashville, Knoxville and Memphis experienced dramatic declines in year-over-year home sales of 13.1%, 17.2% and 27.6%, respectively,
“During the third quarter of 2023, home prices across various Metropolitan Statistical Areas in Tennessee displayed a consistent upward trend,” MTSU’s quarterly Housing Tennessee report states. “Most of these MSAs exceeded the national annual growth average of 4.7%.”
Knoxville had the highest property value rise in the third quarter of this year (10.5%). Meanwhile, Nashville’s metropolitan area had the slowest growth (0.6%).
Murat Arik, director of MTSU’s Business and Economic Research Center, said most Tennessee cities surpassed “the national growth average, though the state’s annual price growth showed signs of slowing compared to the previous year.”
Chattanooga and Johnson City followed Knoxville’s growth with 8% and 9% increases, respectively, over last year.
New homes are coming to market
Housing inventory is also expected to rise in 2024 because of increased building and decreased mortgage costs. This month, mortgage rates dipped to 7% from 8% in October, according to federal mortgage company Freddie Mac.
More good news for potential buyers: Housing construction is up notably, on an annual and quarterly basis.
Construction permits for single-family homes rose 21.2% in the third quarter, which is faster than in the U.S. overall and in the southern region. Annually, Tennessee home-building permits are up 92.6% since last year, according to MTSU’s study.
“While some metrics demonstrate resilience and growth, others highlight the importance of vigilance and an understanding of potential economic challenges,” Arik said.
Mortgage delinquency rates rose slightly but foreclosures fell somewhat.
More people choose renting over buying
Home prices are marching upwards but demand for homes decreased in Tennessee cities.
The result?
This combination of high mortgage rates and low supply of single-family homes for sale has driven more people to the rental market.
The increased demand prompted rental rate…
[ad_2]
Read More: Tennessee 2024 real estate forecast: What homebuyers should know