If you’ve been on the fence about purchasing a home, now might be the perfect time to take the leap. At Greater Nashville Realtors, we regularly monitor the health of the housing market, and our monthly home sales report provides insight into key metrics like median sales prices, number of closings, and perhaps most importantly, the “months’ supply of inventory,” also known as the absorption rate.
This metric is critical because it measures how long it would take to sell all the homes currently on the market if no new listings were added. Essentially, it helps gauge whether the housing market is favoring buyers or sellers. A balanced market typically has four to six months’ worth of inventory, meaning neither side has a significant advantage.
Currently, Greater Nashville is sitting at a four-month supply of homes. While this might suggest a relatively balanced market, the region's housing landscape is evolving rapidly. With 12,053 homes on the market—a 22% increase from the same period last year—we’re seeing improvement in inventory. However, this isn’t enough to fully meet the growing demand, especially with the next housing boom potentially on the horizon.
Recent actions by the Federal Reserve have added another dimension to the market’s dynamics. A .5% interest rate cut last week signals renewed buyer activity, both locally and nationally. On top of that, the Fed has hinted at another .5% cut by year’s end, with a full-point reduction likely in 2025. With mortgage rates expected to decline, buyers who have been waiting on the sidelines are gearing up to enter the market in force.
While increased buyer demand is good news for the market, it will also put pressure on the already limited inventory levels. Despite a surge in home construction during the pandemic, the U.S. housing shortage grew to 4.5 million homes in 2022, further straining affordability. This gap continues to have a ripple effect on markets like Nashville, where housing prices are a concern for many potential buyers.
However, if you’re in the market, the stars are aligning in your favor. With inventory on the rise and interest rates on the decline, buyers have a window of opportunity to secure a home with more favorable terms than in recent years. But don’t wait too long—experts predict that consumer behavior will shift in the next six months, potentially leading to higher prices and fewer concessions for buyers.
Now is the time to reach out to a Realtor, explore your options, and take advantage of this unique market moment. Whether it’s negotiating price or closing costs, today’s conditions might be the best we’ll see for some time. The window of opportunity is open, but it won’t stay that way forever.
