MURFREESBORO, September 26 — Tennessee’s housing market held its footing through the second quarter of 2026, according to the latest statewide report from Middle Tennessee State University, though the picture that emerges from the data is anything but uniform. The quarterly analysis, issued from Murfreesboro and authored by Murat Arik, director of the MTSU Business and Economic Research Center in the Jones College of Business, tracks housing permits, foreclosures and delinquencies, inventories and employment data across the state. It is funded by the Tennessee Housing Development Agency.
Home closings increased in Nashville, Memphis and Knoxville during the quarter, with Knoxville posting the strongest gains both quarterly and annually. Inventory rose across all three markets, indicating continued expansion in available supply.
Prices told a more restrained story. Tennessee home prices rose only 0.13% during the quarter and 2.7% over the year, trailing national growth. Even so, every Tennessee metropolitan statistical area recorded annual appreciation.
Construction and vacancy
Residential construction strengthened. Multifamily permits climbed 15.76% on the quarter, while total permits rose 6.44%. Tennessee’s annual total-permit growth also outperformed declines recorded across the South and the United States as a whole.
The state’s homeowner vacancy rate declined by 0.2 percentage points during the quarter.
Taxes, mortgages and foreclosures
Housing-related tax collections strengthened on both a quarterly and annual basis. Real estate transfer tax collections increased by 12.5% during the quarter, and mortgage tax collections rose by 24.7%. Mortgage tax revenue stood 25.8% above its 2025 second-quarter level.
Mortgage delinquency rates increased during the quarter and year over year in both Tennessee and the United States. Foreclosure activity improved, with rates declining by 0.04 percentage points in both markets, and Tennessee’s foreclosure rate remained slightly below its year-ago level.
The full report, including employment and rental vacancy data, is available through the BERC website. Arik’s team operates under the Jennings A. Jones College of Business at MTSU.
What to watch next is whether Knoxville’s momentum and the multifamily permit surge carry into the third quarter — and whether delinquency trends reverse before they begin to weigh on a market that has otherwise stayed stable.
