Nashville housing inventory improves

A post-pandemic housing shortage has been a top driver keeping prices high in Nashville and nationwide.

• But a bump in new home construction in Nashville, which far exceeds national building rates, could ease prices and stabilize the market — it's basic supply and demand.

By the numbers: More than 108 new homebuilding permits per 100,000 residents were issued in the Nashville area this May, up from about 88 in May 2020 — the early months of the COVID-19 pandemic.

• Of the 2,132 total permits, 1,492 were issued for single-family homes and 629 were for those with five or more units.
• That's per a new analysis of Census Bureau data from Axios' Kavya Beheraj and Alex Fitzpatrick.

The big picture: Recent estimates from Freddie Mac indicate the U.S. is short about 3.8 million housing units, either for rent or purchase, Axios' Emily Peck reports.

Zoom in: A modest inventory uptick in Nashville has already helped relieve some pressure on the historically hot housing market.

• Inventory stood at 9,594 in the greater Nashville area last month, compared to 7,370 in June 2022, according to Greater Nashville Realtors.
• The median price for a residential single-family home in the greater Nashville area was $474,900 last month compared to $495,070 in June 2022.

What they're saying: "For the qualified buyer, the stabilization of home prices in 2023 combined with increased inventory makes now the most buyer-friendly market we have seen in Middle Tennessee in several years," Brad Copeland, Greater Nashville Realtors president, said in a statement.

Reality check: Even though Nashville's inventory has improved compared to pandemic low points, it still lags behind the June 2019 total of 11,610.

State of play: While many newly built homes have targeted (and thus been priced for) relatively wealthier buyers, builders nationally are starting to focus on more affordable projects for first-time homebuyers, per Axios' Matt Phillips.

Yes, but: "There's little sign of a Levittown-style surge of modest-home construction to magically solve the inventory problem any time soon," Matt writes.

• Plus, mortgage rates remain relatively high.