Nov 7, 2022 - Real Estate

Buying a house in Nashville is easier, but not cheaper

Change in monthly mortgage payments, by loan size
Data: Freddie Mac; Chart: Madison Dong/Axios Visuals

The Nashville metro area's real estate market is starting to level off, according to the latest data from Redfin/MLS.

Why it matters: After two-plus years of plummeting inventory and sky-high home prices, Nashville-area buyers have waited a long time for a little relief.

What's happening: Mortgage rates started to surge in May and have since passed 6%.

  • The market has changed significantly since then.

By the numbers: Median home sales prices dropped from $467,000 to $450,000 from May to September.

  • Inventory is up 72.3% since May.
  • Homes are selling more slowly: They sold in 17 days on average in May. In September, the average number of days on market was 39.
  • Fewer homes are selling above the list price. 19% of homes sold above list price in September, compared to 54.6% in May.
  • In September, 33.4% of listings dropped their asking price, up 12.4 percentage points since May.

Yes, but: Monthly mortgage payments are significantly more expensive than they were a year ago, meaning that buying a home isn't getting cheaper.

Flash forward: But there are some indications things could shift even more. A forecast from Moody's Analytics says Nashville home prices could fall 20% from their peak prices this summer, driven in part by surging interest rates.

  • Moody's forecast calls for a 10% price drop nationwide.

The other side: Steve Jolly, president of Greater Nashville Realtors, tells Axios that prices are still up year-over-year, according to his organization's data. They've only fallen from earlier in 2022.

  • If prices continue to drop, he doesn't think they'll fall that severely. He points to the Great Recession in 2008, when Nashville home prices dipped less than the national average.
  • "Nashville's always done better than the nation as a whole," Jolly says of previous downturns.
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