Home Inventory in Rutherford County and a Study on Interest Rate of Home Mortgages in Tennessee

Jan 17, 2023 at 11:19 am by WGNS News

(Rutherford County, TN) The past two-and-a-half to three years has equaled massive changes for the real estate market locally and nationwide. By December of last year, Rutherford County had about 3-months of home inventory that came with a climb in interest rates for home loans.

Just last month on December 4th, David Estes with Parks Realty told WGNS News what 3-months of inventory looked like… The end of 2022 brought with it not only higher interest rates, but also lower prices at closing… Some of those ‘lower prices’ came in the form of buyers not paying over the listing price, which was quite common during the 4th quarter of 2021 and the first three quarters of 2022.  


Throughout 2022 and into the start of 2023, home prices have remained about 17% higher than home prices in 2021, according to RocketHomes.com.

Five to ten years ago, a first-time home buyer in Rutherford County could purchase a stand-alone house for $200-thousand or less, but that has not been the case in recent years. Estes commented on what first-time home buyers are gravitating towards when spending between $315-thousand to $400-thousand…

Homebuyers also have to weigh-in rising interest rates of a mortgage and the expense of a monthly house payment, after making the initial down-payment on a home… Those prices don’t include taxes and insurance.

David Estes has been in the real estate business for almost 30-years.

STUDY: Interest Rates are UP - Mortgage interest rates are now more than double what they were in early 2021. As a result, rising home prices have started to slow down, but not by enough to offset the increased borrowing costs caused by higher rates. Home prices rose dramatically across the U.S. during the pandemic, and now, in some parts of the country, homebuyers are feeling the pain of both high mortgage rates and expensive housing.

At the beginning of the COVID-19 pandemic, the Federal Reserve took aggressive actions to help keep the economy afloat. Mortgage interest rates began to fall steadily, and the average 30-year fixed rate reached a historic low of 2.65% in January 2021. However, inflation began climbing rapidly, and the Federal Reserve started raising interest rates in March. When gradual rate hikes weren’t enough to tamp down inflation, the Fed began moving more aggressively. In November, the average 30-year fixed rate briefly topped 7%, the highest it's been in more than two decades.

Due to both the drive up in home prices that began in 2020 and rising interest rates, mortgage payments have increased rapidly over the last year. The monthly mortgage payment for a median-priced home is now 66% higher than a year ago. According to data from Zillow, the national median home price increased from $318,432 to $357,544 from late November 2021 to late November 2022. At the same time, the average 30-year fixed mortgage rate went from 3.11% to 6.49%.

Both mortgage interest rates and home prices vary on a geographic basis. Additionally, some parts of the country have seen smaller declines in home prices than others. As a result, homebuyers in certain areas have been much more impacted by rising interest rates. On a regional level, the Southeast has experienced some of the largest increases in mortgage payments from last year. Out of the entire U.S., Florida homebuyers have been the most impacted by rising interest rates: mortgage payments for a median-priced home in Florida have increased by over 80% from 2021. South Carolina is close behind, with mortgage payments going up by 76%. While mortgage payments have risen dramatically across the U.S., the increase has been the smallest in Idaho and California, where mortgage payments have gone up by 52.3% and 56.3%, respectively.

To determine the locations where homebuyers are most impacted by rising interest rates, researchers at Construction Coverage analyzed the latest data from Zillow and Freddie Mac. The researchers ranked states according to the percentage change in the monthly mortgage payment for a median-priced home from 2021 to 2022. Researchers also calculated the total change in mortgage payment from 2021 to 2022, the mortgage payment for a median-priced home, and median home price.

TENNESSEE - The analysis found that the mortgage payment for a median-priced home in Tennessee was $898 one year ago, but has since risen to $1,575—a year-over-year increase of 75.4%. Overall, Tennessee residents are the 3rd most impacted by rising interest rates.  

Here is a summary of the data for Tennessee: 

  • Percentage change in mortgage payment (YoY):+75.4% 
  • Total change in mortgage payment (YoY):+$677 
  • Mortgage payment for median-priced home (current):$1,575 
  • Mortgage payment for median-priced home (1 year ago):$898 
  • Median home price (current):$311,721 

For reference, here are the statistics for the entire United States: 

  • Percentage change in mortgage payment (YoY):+65.8% 
  • Total change in mortgage payment (YoY):+$717 
  • Mortgage payment for median-priced home (current):$1,806 
  • Mortgage payment for median-priced home (1 year ago):$1,089 
  • Median home price (current):$357,544 

For more information, a detailed methodology, and complete results, you can find the original report on Construction Coverage’s website: https://constructioncoverage.com/research/cities-where-homebuyers-are-most-impacted-by-rising-interest-rates-2023

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