Homeownership is ‘unaffordable’ in most Middle Tennessee counties according to new report
NASHVILLE, Tenn. (WSMV) - You hear it everywhere you go in Nashville, finding and being able to pay for a house in Nashville is tough.
According to a new report by the Federal Reserve Bank of Atlanta, housing is “unaffordable” in most Middle Tennessee counties.
“Home prices in Nashville have gone up 24% over the past year, and that’s one of the highest in the nation,” Dominic Purviance, expert is residential real estate with the Federal Reserve Bank of Atlanta, said.
Purviance said towards the end of 2021, Nashville passed the threshold of affordability, meaning on average the median income household in the region is paying around 33% of their income if they were to purchase the average price of a house on the market.
A map from the Federal Reserve Bank of Atlanta shows that the median income for homeowners is about $65,400. The median home price is over $380,000.
“You probably need to be making a little bit above the median if you’re going to buy the median price house,” Purviance said.
Purviance said there are a ton of reasons for this. One, the cost of construction has skyrocketed, low inventory, interest rates are going up, inflation on consumer goods and services, and an influx of cash buyers for homes. While housing costs are climbing, annual salaries and wages are not keeping up fast enough.
“So somewhere about $71,000 is what is necessary to afford the median price house in the region,” Purviance said. “If you go back prior to the pandemic, on average a household was probably paying about 28% of their annual income in order to afford, if they were to buy the median price house on the market.”
Purviance believes that the supply chain issues will ease, giving builders a break, but the timetable for when this happens remains up in the air.
“It is a challenge for our local governments to try to figure out how to work with our builders and how to work with the construction industry to see how we can deliver product – more affordable in the future because it’s going to be a challenge,” Purviance said.
Experts said despite the challenges, there are a few things you can do:
- Take your time shopping around.
- Find a good real estate agent to help you look.
- Look for resources. The U.S. Department of Housing and Urban Development offers several options, especially for first-time home buyers.
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