Tennessee’s housing market in the second quarter was stable, said Murat Arik, but not uniform: prices and inventories ticked up while permits and closings fell. Arik directs the MTSU Business and Economic Research Center in the Jones College of Business and wrote the university’s latest statewide report.
Mortgage delinquencies and foreclosure rates “remained largely stable over the quarter and past year, underscoring the overall resilience of Tennessee’s housing market,” he said, pointing to a steady labor force and low unemployment.
Prices
Statewide home prices edged up 0.7% on the quarter, slightly ahead of the 0.5% national gain. Over the year, values climbed 3.7%, just behind the 3.9% rise nationally.
Morristown led the metro areas with 3% quarterly growth and a 5.24% jump year over year. Johnson City followed at 2.7% (4.6% annually) and Clarksville at 2.1% (4%). Chattanooga rose 1.2% and Jackson 0.6%. Memphis and Nashville each gained only 0.48%, and Knoxville a bare 0.08%. Two areas slipped: Kingsport-Bristol fell 0.27% and Cleveland 0.8%.
Closings and inventory
The big three metros diverged. Nashville closings dropped 4% on the quarter and 2.3% on the year. Memphis was flat quarterly but down 6.2% annually. Knoxville rose 0.6% on the quarter and fell 0.9% over the year. Inventories in those metros climbed 7% to 8% quarterly and between 21% and 40% annually.
Permits fall
The weakness was in construction. Single-family permits in Tennessee slipped 2% on the quarter, against roughly 5% declines in the South and the nation, and fell 4.5% over the year, compared with 8% in the South and 7% nationwide.
Multifamily permits were the sharper story. Tennessee recorded a 36.4% quarterly drop while the South dipped 0.3% and the U.S. rose 6%. Annually, Tennessee’s multifamily permits fell 21.6%, even as the South gained 3% and the country 9.8%. Total permits in the state declined 7.5% year over year, against 5.4% in the South and 1.8% nationally.
The report is funded by the Tennessee Housing Development Agency, and employment data and further breakdowns are on the BERC website at mtsu.edu/berc/housing.
