Real Estate Industry Continues to Drive Tennessee Economy

With so much discussion this year surrounding the economy—from inflation and the job market to the potential ramifications of artificial intelligence—one thing remains certain: real estate continues to be a central force in not only the national economy, but here in Tennessee as well.

Generating billions in economic activity, supporting industries far beyond housing and contributing nearly 17 percent of the state’s total economic output, real estate remains a cornerstone of Tennessee’s economy and a major driver of growth well beyond the purchase of a home.

In 2025, real estate activity contributed $97.7 billion to Tennessee’s gross state product, accounting for 16.6 percent of the state’s total economic output—up from $84.2 billion, or 15.7 percent, the previous year.

Nationally, the real estate industry accounted for $5.6 trillion, representing 18.1 percent of the nation’s gross domestic product. As an industry sector, real estate ranks among the top contributors to the nation’s GDP, and that impact is strongly reflected here in the Volunteer State.

Looking even closer at the industry, each individual home transaction strengthens communities and fuels local businesses. At the forefront of that impact are REALTORS®, helping connect buyers and sellers while driving economic growth across the state. With each transaction, a typical home sale in Tennessee generates $123,440 in economic activity. That figure reflects a wide range of contributions, including income for real estate professionals, expenditures tied to home purchases, new construction activity and the extended “multiplier effect” as those dollars continue circulating through local economies.

And it’s not just the purchase and sale of real property driving such a significant portion of the economy. The real estate industry also plays a critical role in job creation and long-term economic growth. New home construction accounts for the largest share of the total impact at $63,870, or 51.7 percent, underscoring the close connection between home sales and ongoing development across the state. In fact, for every existing home sale, one-sixth of a new home’s value is added to the economy.

With continued population growth and more businesses choosing to call Tennessee home, housing demand and its related economic activity are expected to remain key drivers of the state’s momentum moving forward. When looking at the data and the significant role real estate plays on the local, state and national level, it’s more important than ever to pursue forward-thinking solutions that expand housing opportunities for the workforce. Doing so not only helps more hardworking Tennesseans build generational wealth, but also strengthens local economies and communities across the country.