Just a few weeks ago, mortgage rates reached 7% for the first time since May 2024, adding pressure on buyers in an already challenging housing market. This occurred despite the Federal Reserve cutting rates by a full percentage point in recent months, which had sparked hope for financial relief among homebuyers. Yet, home prices continue to rise both in Nashville and nationally.
Most experts agree that mortgage rates are likely to remain in their current range throughout 2025. Waiting for rates to drop could mean facing even higher home prices due to ongoing appreciation.
For context, the median sales price for a single-family home in January was $460,000, compared to $500,000 now—an increase of nearly 9%. The Middle Tennessee market has experienced steady growth for 13 years. While appreciation has slowed compared to the pandemic-era surge, homes are still gaining an average of 5.9% annually since 2004, building strong equity for homeowners.
If you’re considering buying, don’t be discouraged. While today’s rates might seem high, they shouldn’t deter you from entering the market if you’re ready. If you’re pre-approved with a lender, keep in mind that refinancing is always an option when rates eventually drop, allowing you to lower your monthly payments and save in the long term.
Homebuying remains one of the most reliable ways to build long-term wealth. By investing now, you can take advantage of appreciation and start building equity sooner. Buyers currently have more options and negotiating power than in recent years as the market rebalances. Consulting with a knowledgeable Realtor is key to navigating the complexities of today’s market. Realtors offer invaluable expertise, helping you find the right home, negotiate favorable terms, and make informed decisions.
Real estate investing follows the wisdom of the old adage: the best time to invest was 20 years ago, and the second-best time is today. Despite a slower market, home prices remain strong. With 66 people on average moving to Nashville daily, housing demand continues to drive growth.
