Murfreesboro, TN - Tennessee’s housing market remained stable in the first quarter of 2025, buoyed by strong employment figures and increased permitting activity, according to a new statewide analysis from Middle Tennessee State University. MTSU’s Business and Economic Research Center Director Murat Arik described the market as “balanced,” even as regional fluctuations emerged in home prices and sales volumes. Multifamily construction permits were a standout, jumping 66% from the previous quarter and 62.25% year-over-year — a signal of heightened development activity, particularly in denser housing segments. Statewide, home prices saw a marginal quarterly increase of 0.11%, trailing the national average of 0.8%. On a year-over-year basis, Tennessee home values grew by 3.7%, compared to a national gain of 4.6%.

The Statewide Picture

The report highlighted mixed performance in metro areas. Nashville experienced a 3.75% quarterly dip in home closings but was up 3.44% year-over-year. Memphis saw a quarterly rise of 6%, though closings were down 8% from the same period last year. Knoxville slipped slightly by 0.23% for the quarter but maintained a 3% annual increase. Inventory levels rose across the board, climbing as much as 14.2% from the previous quarter and up to 39% over the year.

Price movements by region:

• Top quarterly increases: Morristown MSA (+2.7%), Kingsport–Bristol MSA (+1.8%)
• Moderate gains: Chattanooga MSA (+1%), Cleveland MSA (+0.63%)
• Minimal growth: Clarksville MSA (+0.5%), Memphis MSA (+0.46%)
• Declines: Knoxville MSA (-0.24%), Johnson City MSA (-2.2%), Jackson MSA (-2.7%)

On a year-over-year basis, Kingsport–Bristol led all markets with a 10.3% surge in home prices, followed by Knoxville at 4.13% and Chattanooga at 3.8%.

The BERC report, funded by the Tennessee Housing Development Agency (THDA), offers quarterly insight into housing trends, including construction activity, vacancy rates, and mortgage indicators. The full report is available at mtsu.edu/berc/housing.

THDA, the state’s housing finance agency, supports affordable housing through loan programs, nonprofit partnerships, and federal program oversight. Learn more at thda.org.