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Home Sales Report
July 2024
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East Tennessee home sales increased 5.2% from the previous month, and increased 9.3% from a year ago.
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The median sale price was $374,950 — up 7.13% from the previous year.
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Total housing inventory increased from the previous year – up 43.2% from a year ago.
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Half of the homes sold were under contract in 15 days or less, up from 9 days a year ago.
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44.61% of homes sold for the asking price or above, with 23.72% selling for more than the asking price. 10.32% sold for at least $10,000 over asking and 4% sold for at least $25,000 over asking.
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The sale-to-list price ratio decreased from last month to 98% – down from 98.6% a year ago.
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New construction represented 13.28% of total home sales.
East Tennessee REALTORS® reports home sales data using a seasonally adjusted annualized rate (SAAR), a statistical measure of home sales that takes into account typical seasonal fluctuations in the real estate market, such as increased home sales during the spring and summer months, by adjusting the data to provide an annualized rate. This rate represents the projected number of homes that would be sold over a year if the current sales pace were to continue.
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What's the Outlook? After a dramatic decline in June, home sales in July showed a slight recovery. Similarly to June, mortgage rates remained below 7% for the entirety of July. The inventory was 43.2% higher than this time last year which is likely helping the home sales recovery in July. There was a 4.7% increase in active listings from June to July. The median sale price decreased month over month for the first time since March 2024, although only moderately.
Knox County saw home sales increase 3.9% from the previous year and 14.9% over the previous month. The data shows a 54.3% increase in inventory over this time last year and a 6.5% increase month over month.
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Who Can Currently Afford to Buy a Home? | |
The National Association of REALTORS® (NAR) recently released a study on housing affordability. Specifically NAR was looking for how affordability has changed over the years. The factors used were the Housing Affordability Index (HAI) and the payment-to-income ratio. The HAI is a measure that looks at the relationship between median home prices, median family income, and mortgage rates. NAR found that across the country affordability has decreased since 2020, with a slight move towards affordability in 2024 with decreasing mortgage interest rates. There is a stark comparison for potential first time homebuyers as their HAI is much lower. | |
The payment-to-income ratio looks at percentage of a typical family's gross income spent on mortgage payments. This ratio shows that since 2023 the typical family is considered cost burdened when purchasing a median-priced home. Similarly to the HAI first-time homebuyers are once again shown to have a higher cost burden likely due to these buyers typically having a lower income to begin with. | |
NAR compared the affordability in 2019, 2021, and currently showing the stark decrease in affordability over just five years. An important note is that this data is at a national level, but locally we would anticipate similar or worse circumstances as homes in the East Tennessee region have outpaced the national average during the 2022-2024 time frame. | |
Inventory Increases on the Horizon | |
Over the past few years as affordability has continued to decrease the conversation has been that more units are needed in order to solve the affordability crisis. Since 2008 we have seen continuous under building in our area, even as completions began to gradually increase in 2013. We still see our area under building, however there are more units on the way. | |
According to the Knoxville-Knox County Planning 2023 Development Activity Report, 2023 was a record breaking year for the number of residential building permits in the area. The available data from the MG Research Group shows that during the first six months of 2024 the Knoxville Metro Area was already outpacing the prior record year. This trend is consistent across comparable metropolitan areas in Tennessee and the country as a whole has seen a 13.7% increase in building permits year over year. Although the Knoxville Metro Area falls behind Nashville, it is currently outpacing Chattanooga and Memphis. If this trend continues with the decrease of mortgage rates we would anticipate greater inventory and possibly even affordability in the future. | | |
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"The record-high home prices in most metro markets bring good and bad news. It's terrific news for homeowners who are moving ahead in wealth gains. However, it's difficult for those wanting to buy a home as the required income to qualify has roughly doubled from just a few years ago."
– Lawrence Yun, Chief Economist at NAR
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Home sales in East Tennessee began to recover in East Tennessee in July and we are seeing housing inventory continuing to increase in August by 3% month over month. Most counties in the East Tennessee REALTORS® footprint saw an increase in listings with Knox, Roane, and Scott experiencing the largest monthly increase in inventory. Fentress, Monroe, Morgan, and Roane saw decreases in their monthly inventory in August, although these were minor decreases with only a few listings impacting this decrease. | |
Stay up-to-date with the most recent information about East Tennessee's housing market. Here's the latest from local media: | |
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Mortgage Rates Remain Below 7%
Mortgage rates remained below 7% through all of August, reaching the lowest level since May 2023. According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed mortgage rate (30Y FRM) averaged 6.35% for the week ending July 29, 2024, compared to an average of 7.81% this time last year.
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