WHERE ARE HOME PRICES GOING?
While average and median home prices in the Knoxville area are still slightly above what they were at this time last year, will this continue or will they begin to drop as housing inventory rises?
Despite interest rates dropping over the past few weeks, they still aren’t low enough to significantly boost homebuyer demand. That said, most credible mortgage experts and economists still predict interest rates to be on a downward trend by the end of this year. Lower interest rates mean more home buyers.
The continued upward trend in the cost of living in Knoxville appears to be significantly affecting people in our area. Per capita income hasn’t kept pace with rising prices in many cases, leaving many people with less disposable income and likely contributing to the rapid increase in overall consumer debt (e.g., personal loans, credit cards). As a result, it’s highly likely that we will see more people having to sell their homes to access the equity they have accumulated over the past few years to keep up with living expenses.
On the flip side, Knoxville’s unemployment rate remains extremely low. There is also a steady flow of new, higher-paying jobs from companies moving into the Knoxville area. These are two major reasons why we continue to see home price appreciation in our area.
If home price growth remains flat, interest rates drop into the low 6%- high 5% range, and the unemployment rate stays low, we should expect a healthy local housing market heading into 2025.
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