Knox County Housing Market Update: Strong Buyer Demand Keeps the Market Moving
The local housing market continues to outperform expectations as we head into the heart of the summer selling season. After a strong spring, last month delivered another month of impressive sales activity, rising home prices, and continued buyer competition despite a limited supply of available homes.
For anyone wondering whether the market is slowing down, the latest data tells a different story. Buyers remain active, sellers continue to benefit from strong demand, and well-priced homes are moving quickly across much of East Tennessee.
Home Sales Continue Their Spring Momentum
Home sales increased 11.3% compared to last year, marking the second consecutive month of significant year-over-year growth. In fact, there were 2,015 single-family home sales, making it the strongest May since 2019.
Even more encouraging is what’s happening behind the scenes. Pending sales (homes currently under contract) rose 15% compared to last year.
While higher mortgage rates continue to affect affordability, buyers have clearly adjusted to today’s market and are moving forward when the right opportunities arise.
Home Prices Reach a New High
The median home sale price was $415,000, representing a slight increase over June 2025.
This continued appreciation reflects a simple reality: demand continues to outpace supply. Buyers are competing for a limited number of available homes, especially in desirable neighborhoods and price ranges.
The typical home sold in featured:
- 3 bedrooms
- 2.5 bathrooms
- 1,853 square feet
- Approximately one-half acre lot
Notably, the median home size reached its highest level since 2023, indicating that buyers continue to prioritize additional living space and functional floor plans.
Inventory Remains Tight
Although total housing inventory is 7% higher than one year ago, available inventory actually declined 4% from last month.
Historically, inventory builds throughout the spring and peaks during July. This year, however, homes are selling faster than new listings are entering the market.
For buyers, this means preparation remains essential. Having financing in place and acting quickly when the right property becomes available can make the difference between winning and losing a home.
For sellers, limited inventory continues to create favorable conditions, particularly for well-maintained homes that are priced appropriately.
Homes Continue to Sell Quickly
The pace of the market remains healthy…
- 43.1% of homes sold at or above the asking price.
- Nearly 20% sold for more than asking.
- More than 8% sold for at least $10,000 over list price.
- Approximately 3% sold for $25,000 or more above asking.
- The average seller also received 98.9% of their list price, demonstrating that properly priced homes continue to command strong offers.
New Construction Is Helping (But Not Enough?)
New construction accounted for 13.1% of all home sales, up slightly from 12.3% last year.
While builders continue adding inventory, demand remains strong enough that new construction alone has not been able to balance the market.
Commercial and Rental Markets Show Mixed Signals
Knoxville’s commercial real estate market remains healthy.
Office, retail, and industrial vacancy rates continue to hover around an exceptionally low 2–3%, while several new Class A office developments are finally underway after several years of limited construction.
The rental market presents a more complicated picture.
Although Knox County permitted a record number of multifamily units in 2025, fewer than half of those projects are reaching the rental market each year. Rental rates have remained relatively flat for now, but demand continues to exceed supply, particularly for housing affordable to households earning the area’s median income.
What to Expect This Summer
Looking ahead, the overall outlook remains positive.
As long as mortgage rates remain near the current 6.4%–6.6% range, East Tennessee is expected to continue experiencing healthy buyer activity throughout June and July.
Strong pending sales, limited inventory, and continued price appreciation all point toward an active summer market.
Today’s market isn’t as frenzied as the pandemic years, but it also isn’t a buyer’s market. Success depends on strategy, preparation, and understanding the unique dynamics of each neighborhood.
For sellers, pricing correctly and marketing effectively remain critical. For buyers, working with a knowledgeable local expert can provide a significant advantage when navigating competitive situations.
Data sources: East Tennessee Realtors Association & East Tennessee Realtors MLS
Thinking About Buying or Selling a Home?
Whether you’re considering selling your current home, purchasing your next property, or simply curious about your home’s current value, understanding today’s market conditions is the first step toward making a confident decision.
The experienced team at Holli McCray Group closely tracks market trends across Knoxville and East Tennessee and can help you develop a strategy tailored to your goals.
Contact us today for a consultation and strategy session to help you make the most of today’s evolving real estate market.
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