After months of an expensive, competitive housing market, the people of Nashville might be in for a breather. Since the beginning of this year, interest rates have risen from 3% to over 6%.
As a result, less and less people are looking to buy houses in Nashville and around the country. Demand plummeted, which means that the housing supply is slowly aligning with the existing need.
The trend looks promising for home buyers, considering that home sales were down over 13% in the month of September. As demand for houses decreases, hopefully, sellers can look forward to dropping prices in the coming months.
An Unexpected Outcome
However, the increase in interest rates has had another effect on the Nashville housing market that lies behind the scenes. The increase in interest rates also increased the costs of home-building. Because of this, housing developers have slowed production in Nashville.
A continual supply of new homes is crucial to maintaining a healthy supply pool. In order to truly solve the current housing crisis, a true supply solution needs to be found.
Where Does Nashville Rank in the US?
As far as cities go, Nashville is still relatively affordable. On a list of most expensive rents in the nation, Nashville ranks number 26. In addition, the median home price in Nashville is currently $489,000, which is just about 14% above the national median.
So while Nashville is still an expensive place to live and costs have been on the rise for some time, it ranks well when compared to other major cities.