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Home Sales Report
April 2024
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East Tennessee home sales increased 14% from the previous month and 17.2% from a year ago.
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The median sale price was $354,450 — up 9.9% from the previous year.
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Total housing inventory increased – up 35.2% from a year ago and 3% from the previous month.
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Half of the homes sold were under contract in 16 days or less, up from 9 days a year ago.
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46.3% of homes sold for the asking price or above, with 23.6% selling for more than the asking price. 10.5% sold for at least $10,000 over asking and 3.3% sold for at least $25,000 over asking.
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The sale-to-list price ratio increased to 98.1% – down from 98.8% a year ago.
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New construction represented 12.7% 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 home sales slowed in March as strong economic and job growth figures pushed up mortgage rates, April saw the greatest number of home sales in 2024. Despite mortgage rates remaining high, home sales saw a resurgence. Pending listings continue to increase this month by 9% over the previous year across the region. Although still low by historical standards, inventory levels are considerably higher than a year ago.
Similar to the broader East Tennessee region, Knox County saw home sales increase. However, this increase was higher than the overall region with a 20.7% increase over the previous year – the third consecutive month of annual gains.
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National Association of REALTORS® Reaches Agreement to Resolve Nationwide Claims Brought by Home Sellers | |
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The National Association of REALTORS® announced a proposed agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions.
In our commitment to maintaining the transparency and trust that you've come to expect from East Tennessee REALTORS®, we have launched a new landing page: etnrealtors.com/settlement. This centralized hub is dedicated to keeping REALTORS®, industry stakeholders, and the public informed with the latest and most significant developments regarding the proposed settlement.
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Department of Veteran Affairs Signals Temporary Suspension on Buyer Agent Payment Ban | |
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In late March 2024, the National Association of REALTORS® sent a letter to the VA requesting a policy change to make certain veterans continue to be able to use the VA home loan program, while also being able to have professional representation. This loan program is the only loan program that has this explicit prohibition included.
On May 21, 2024 the VA Deputy Director of Policy shared the plan to temporary lift this ban that restricted veterans ability to pay real estate professional when purchasing property.
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East Tennessee Rental Update | |
Although housing affordability and availability continues to be a problem across East Tennessee, there are signs that the available rental units are beginning to match the demand. The occupancy rate has decreased to 95.7% from its peak of 98.9% in Q4 2021. This is expected to continue to moderate or decrease as more units come online, especially with 1,564 units becoming available over the next 4 quarters. Although we have seen a slight decline in apartments currently under construction we are still seeing historic levels of building. | |
As we continue to see the occupancy rate decrease and the supply increase, we also see the effective rent year over year change decrease. This percent change is down 21.4% from the peak during Q3 2022. Although the average rent continues to be $1,448 which is a 55% increase from the pre-pandemic average effective rent. | |
The spring selling season is in full swing with housing inventory increasing by 11% from April to May across the entire East Tennessee REALTORS® footprint. Morgan, Scott, and Loudon counties experienced the largest monthly increase in inventory, while Monroe and Anderson counties experienced minor monthly declines. | | |
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“Astonishingly, greater than 90% of the country’s metro areas experienced home price growth despite facing the highest mortgage rates in two decades. In the current market, rising prices are the direct result of insufficient housing supply not meeting the full demand.”
– Lawrence Yun, Chief Economist at NAR
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East Tennessee Housing Affordability and the Impact of Mortgage Rates
The National Association of REALTORS® in collaboration with Realtor.com recently evaluated how changes in mortgage rates could impact the affordability of houses across multiple income levels across the country. This data included an evaluation of Knoxville and showed the discrepancy not only between affordability at different mortgage rates but also the availability of listings between income levels.
First, when looking at how a decrease in mortgage rates impacts the cost of a home. The influence of mortgage rates on affordability cannot be understated. As is shown in the included chart, even reducing the list price of a home does not support affordability to a significant level like a smaller reduction in mortgage rate.
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Affordability has been a common topic across the country, but especially here in East Tennessee. The NAR data shows that the affordability crisis continues in Knoxville to the point that those making the median household income in Knoxville, reported by the Knoxville Chamber as being $62,911, can only afford a fraction of the listings in the area. This data is especially jarring when considering that this is with an interest rate of 6.80% which is 23 basis points lower than the current rate. Likely meaning even fewer listings are affordable to the average Knoxville resident. | |
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 Return to 7 Percent
Mortgage rates surpassed 7% in April as strong economic and inflation data decreased the likelihood of interest rate cuts in the short-term, however for approximately one week in May they did drop below 7%. This provided short lived relief for buyers. According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed mortgage rate (30Y FRM) averaged 7.03% for the week ending May 30, 2024, compared to an average of 6.6% this time last year.
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What's the Outlook? In their most recent Housing and Mortgage Market Outlook, Freddie Mac shared that we are unlikely to see low mortgage rates in 2024. They highlighted how the continual increase in home prices will likely partially impact the high interest rates remaining high due to the inflationary pressure. Looking forward we do not anticipate any dramatic drops in mortgage rates in the near future. | |
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