Murfreesboro, TN - Tennessee’s housing market showed signs of quiet strength in the second quarter of 2025, according to a new statewide report from Middle Tennessee State University. While home prices and inventory levels ticked upward, the number of new construction permits and home closings took a noticeable dip—painting a picture of a market that’s steady but shifting.
Dr. Murat Arik, who leads the Business and Economic Research Center at MTSU, said, “The state’s housing sector is holding its own thanks to a stable labor force and low unemployment. Mortgage delinquencies and foreclosure rates remained largely stable over the quarter and past year. It’s a sign of resilience.”
Metro Markets Show Mixed Signals
Across the state, home prices rose 0.7% from the previous quarter—just ahead of the national average. Year-over-year, values climbed 3.7%.
However, closings told a different story. Nashville saw a 4% quarterly drop, Memphis stayed flat but fell 6.2% from last year, and Knoxville managed a slight 0.6% uptick, though it too was down compared to 2024.
Inventory, on the other hand, is on the rise. All three major metros--Nashville, Memphis, and Knoxville—reported quarterly increases of 7% to 8%, with annual jumps ranging from 21% to 40%.
Permits Take a Hit, Especially for Multifamily Units
Construction activity slowed, with single-family permits down 2% statewide. Multifamily permits saw a sharper quarterly drop of 36.4%, bucking the national trend, which saw a 6% increase. Overall, Tennessee’s total housing permits fell 7.5% year-over-year.
Where Prices Are Rising—and Falling
Morristown led the state in quarterly price growth at 3%, followed by Johnson City and Clarksville. Meanwhile, Memphis, Nashville, and Knoxville saw only modest gains, and Cleveland posted the steepest quarterly decline at 0.8%.
Year-over-year, Morristown again topped the charts with a 5.24% increase, with Johnson City and Clarksville close behind.
The full report, funded by the Tennessee Housing Development Agency, offers a deeper dive into employment, construction, and mortgage trends. https://www.mtsu.edu/berc/housing/.
