What to expect from Nashville's 2024 housing market
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Real estate in 2023 was shaped by climbing interest rates that pinched the market and slowed home sales, but local Realtors expect the trend to shift in the new year.
What they're saying: "The worst is over," Kevin Wilson, the president of Greater Nashville Realtors, tells Axios.
Driving the news: Mortgage rates rose above 8% last fall. "It not only sidelined buyers, but it also sidelined sellers in existing homes because they could not afford to let go" of their lower interest rates, Wilson said.
- But rates have trended down since then — 30-year rates are currently hovering around 6.7%. And rate cuts are anticipated this year.
Why it matters: Wilson and other experts expect falling rates will eventually hit a "tipping point" in 2024 and ultimately open the door to a more active market in Nashville.
- He predicts that point is somewhere around 6.5%.
The intrigue: A recent report from the National Association of Realtors ranked Nashville as one of the markets with the most pent-up demand.
- "A lot of people have put their lives on hold since COVID started in 2020, and I think a lot of people are kind of done [waiting]," Jessica Averbuch, CEO of Zeitlin Sotheby's International Realty, told the Nashville Business Journal.
Zoom out: If the economy is steady, rates could land around 6%. If the economy stumbles, mortgage rates could fall more significantly, Greg McBride, Bankrate's chief financial analyst, told Axios' Brianna Crane.
- No one can say with certainty just how much mortgage rates will change because they are impacted by inflation and the Federal Reserve.
But, but, but: Lower mortgage rates won't clear all buyer hurdles and actually could push home prices higher if demand surges and inventory remains low.
What he's watching: Wilson says that dynamic might inspire Nashville buyers to act quickly.
- "Buyers have a much more balanced market than they have had for years in this city. The struggle that they are having is the interest rates."
- "But if you wait until interest rates go down, you're waiting to jump in when everyone else is jumping in."
- "Right now is when you're going to see the most stabilized pricing in the Nashville market," Wilson said. "It's not going down."
The big picture: Wilson expects condos and townhomes to continue to be popular options for buyers looking to compensate for higher interest rates by seeking a lower price tag.
- He also expects to see more high-density developments along major corridors that could benefit from a possible expansion of public transit, like Charlotte, Murfreesboro and Gallatin pikes.