Tennessee’s housing report data for the last quarter of 2020 “generally show positive growth in Tennessee’s economy” with the housing market seeing “strong upswings” in single-family permits and tax collections, increased closings and home prices and lower inventories.
The MTSU Business and Economic Research Center’s statewide report for the fourth quarter tracked positive trends among key economic indicators, noted report author Murat Arik, director of the BERC at Middle Tennessee State University.
In home sales, closings increased for both the quarter and year in all three grand regions: Memphis had the most substantial increase over the quarter of 7.2%. Nashville and Knoxville followed, with quarterly increases of 5.8% and 5.3%, respectively.
The highest jump year-over-year was seen in Knoxville (+18.9%), followed by Nashville (+17%) and Memphis(+13.3%).
Home prices statewide increased by 7% year-over-year, while home prices in the U.S. increased by 6%. All Metropolitan Statistical Areas (MSAs) in Tennessee also had growth in home prices year-over-year, with the Cleveland MSA highest (+9%).
While growth rate in the Clarksville MSA slightly dipped 0.3 percentage points from the previous quarter, the area still maintained one of the highest rates of growth (+8.6%). Home prices increased in all other areas over the quarter, except for Kingsport-Bristol MSA, which saw a drop of 1.06 percentage points over the quarter but still an annual increase of 4.6%.
Other report highlights:
- PERMITS: Single-family permits were up across all regions statewide for the quarter (+6.14%) and year-over-year (+19.3%). Multi-family permits fell in all regions over the quarter and year-over-year. Multi-family permits in Tennessee decreased by 17% over the quarter and 1.2% over the year; in the South, by 4.8% over the quarter and 14.4% over the year; and in the U.S., by 3.3% over the quarter and 12% over the year. While total permits were down for the quarter (-3.6%), they were up for the year (+9.5%).
- INVENTORY: Housing inventory dropped in quarterly and annual comparisons in all areas. Quarterly: Nashville (-16.2%); Knoxville(-10.22%); Memphis (-6.1%). For each region, there were significant downturns in inventory over the year: Knoxville (-46.5%); Memphis (-33.4%); Nashville (-33.5%).
- DELINQUENCIES: Mortgage delinquencies dropped over the quarter (-0.4 percentage points) but increased over the year (+2.08 percentage points) in Tennessee. A similar pattern was found nationwide: a decrease of 0.41 percentage points quarterly and an increase of 3.12 percentage points year over year.
- FORECLOSURES: The foreclosure rate in Tennessee was 0.04% for the fourth quarter, higher than the previous quarter by 0.01 percentage points, but lower than the previous year by 0.17 percentage points. The U.S. foreclosure rate remained at 0.03%, with no quarterly change and an annual decrease of 0.18 percentage point.
View the full report, including charts, at https://www.mtsu.edu/berc/housing/.
BERC’s report is funded by Tennessee Housing Development Agency, or THDA. The quarterly report offers an overview of the state’s economy as it relates to the housing market and includes data on employment, housing construction, rental vacancy rates, real estate transactions and mortgages, home sales and prices, delinquencies and foreclosures.
THDA is the state’s housing finance agency and is committed to expanding safe, sound, affordable housing opportunities for low- and moderate-income Tennesseans. This is achieved through a robust home loan program, competitive funding for local nonprofit and municipal agencies, and the administration of nine federally funded programs. THDA publishes research on affordable housing and THDA programs and beneficiaries. THDA also coordinates state planning for housing through the Consolidated Planning process, annual Action Plans, and annual Performance Reports. See http://thda.org for more information.