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September 2024 Market Pulse Newsletter

Market Pulse is a monthly research newsletter providing a rundown of the latest housing and economic research and analysis across East Tennessee.

Home Sales Report

August 2024

  • East Tennessee home sales increased 1.9% from the previous month, and increased 2.0% from a year ago.
  • The median sale price was $365,000 — up 4.29% from the previous year.
  • Total housing inventory increased from the previous year – up 42.5% from a year ago.
  • Half of the homes sold were under contract in 20 days or less, up from 10 days a year ago.
  • 43.76% of homes sold for the asking price or above, with 21.20% selling for more than the asking price. 9.41% sold for at least $10,000 over asking and 3.23% sold for at least $25,000 over asking.
  • The sale-to-list price ratio decreased from last month to 97.6% – down from 98.3% a year ago.
  • New construction represented 12.59% of total home sales.

East Tennessee REALTORS® reports home sales data using a seasonally adjusted annualized rate (SAAR), a statistical measure of home sales that takes into account typical seasonal fluctuations in the real estate market, such as increased home sales during the spring and summer months, by adjusting the data to provide an annualized rate. This rate represents the projected number of homes that would be sold over a year if the current sales pace were to continue.
What's the Outlook? After a dramatic decline in June, home sales continued to recover in August. Mortgage rates remained below 7% for the entirety of August, for the third month in a row. The inventory was 42.5% higher than this time last year and is increasing month over month likely helping the rate of home sales. There was a 4.3% increase in active listings from July to August, slightly lower than the June to July increase. The median sale price decreased month over month for the second month in a row.

Knox County saw home sales increase 9.8% from the previous year and 5.7% over the previous month. The data shows a 52.6% increase in inventory over this time last year and a 7% increase month over month.

Market Pulse Survey:

Q3 2024 Results

Results from the latest iteration of East Tennessee REALTORS® Market Pulse Survey indicate seller traffic across East Tennessee continued to improve in the third quarter of 2024, however there is decreasing buyer traffic.
  • Buyer traffic continued to decrease in the third quarter of 2024. Fourteen percent of respondents reported seeing more buyer traffic than this time last year, compared to 16% last quarter. Conversely, seller traffic increased with 29% of respondents reporting more seller traffic than this time last year, compared to just 17% last quarter.
  • REALTORS® expectations about buyer and seller traffic over the next three months remained relatively even in the third quarter of 2024. 24% of respondents expect more buyer traffic than this time last year, compared to 22% last quarter. Expectations about future seller traffic, increased with 30% of respondents expecting seller traffic to increase compared to this last time last year.
  • The typical home sold in Q3 2024 received an average of 1.9 offers, less than a year ago.
  • There was a slight recovery in the percentage of REALTORS® who expect home sales will increase over the next year with 41% supporting this whereas in Q2 2024 35% of REALTORS® expected an increase in home sales.
  • 61% of REALTORS® expect home prices will increase over the next year, while 14% expect no change and 25% expect prices to decline over the next year.
  • All-cash sales represented 29% of all home sales in Q3 2024, which has remained stagnant over the past year.
  • 56% of buyers in the past three months waived at least one contingency in their purchase contract, down from 63% a year ago, but up from 53% in Q2 2024.
  • Among homes that went under contract in Q3 2024, 4% had an appraised value that was less than the contract price. This has decreased in this quarter compared to the past year.

 

Access the Full Results

New Construction Insights
As affordability continues to be an issue in East Tennessee and inventory is the primary way to increase affordability and the availability of housing, Realtor.com recently published a report regarding new insights into new construction. According to this report Tennessee ranks number 8 in the country for the new construction share of total listings and number 10 for the permits per capita. As was reported last month, Knoxville ranks second in the state for number of building permits with 3,036 pulled in the first half of 2024 alone. Although these new construction homes may not be more affordable compared to existing homes, the overall increase in housing stock is beneficial. The median new construction home in our twelve county jurisdiction is approximately $88,000 more than an existing home.
New construction sales historically have made up approximately 15% of total sold listings in our East Tennessee region. Over the past year when comparing new construction listings to existing homes, new construction homes have stayed on the market longer during eight of the past thirteen months with the peak being in February 2024. However, over the past couple of months new construction listings have been staying on the market fewer days and existing homes have seen an increase in days on market.
Overall, Realtor.com reported they expect new construction homes to continue becoming more affordable and giving a much needed boost to the housing inventory across the country. A trend we are also seeing right here in East Tennessee.

 

Read the Full Report Here

"Due to the already low mortgage rates compared to spring, the purchasing power for home buyers has been lifted by around $50,000 for those with a $2000 monthly mortgage payment budget. Consumers who were priced out due to earlier higher mortgage rates could now be back in the market."

– Lawrence Yun, Chief Economist at NAR
Home sales in East Tennessee continued to recover in East Tennessee in September and we are seeing housing inventory continuing to increase in September by 4% month over month. Most counties in the East Tennessee REALTORS® footprint saw an increase in listings with Campbell, Scott, Union, and Cumberland counties experiencing the largest monthly increase in inventory. Monroe is the only county that saw a decrease in their monthly inventory in September, although this was only a decrease of two listings month over month.

IN THE NEWS

Stay up-to-date with the most recent information about East Tennessee's housing market. Here's the latest from local media:
WVLT: 2024 Q4 housing market trends: Rate relief arrives

Knox News: Here's how you can add to Knoxville's plan on homelessness and housing shortages

WBIR: 'Desperate to have options' | Interest rate drop offers new hope for homebuyers

Mortgage Rates Remain Below 7%

Mortgage rates remained below 7% through all of September, reaching the lowest level since September 2022. According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed mortgage rate (30Y FRM) averaged 6.08% for the week ending September 26, 2024, compared to an average of 7.19% this time last year.
What's the Outlook? According to NAR Deputy Chief Economist this is the lowest mortgage interest rate in 24 months. This decrease puts the mortgage interest rate far below the historical average of 7.72%. "Mortgage rates are not likely to come down in a meaningful way for home buyers. While there could be minor reductions in mortgage interest rates, those waiting for further improvements in affordability could be priced out further as home prices continue to climb." Although this initial decrease is supporting affordability, the expectation of a more dramatic decrease in the immediate future is not expected. Overall, as expected there was a decrease in the mortgage rate this month, however it was minor.

WHAT WE'RE READING
How Gen Z outpaces past generations in the homeownership race

CNBC| September 5, 2024
The American Dream Without a House? Believe it

NY Times| September 7, 2024
Most Popular Markets People Are Moving To

Realtor.com | August 6, 2024
Mortgage rates are plummeting, but will sales grow? Slight Uptick in Home Sales as More Listings Hit Market

HousingWire | September 11, 2024
RENTAL MARKETS ARE COOLING, BUT RENTS STILL FAR EXCEED PRE-PANDEMIC LEVELS

Joint Center for Housing Studies of Harvard University | September 3, 2024

For questions about the newsletter or its contents, please contact Catrin Latham at catrin@etnrealtors.com.

Data Attribution: You are welcome to use or reproduce this survey data for your own purposes, but we ask that you attribute any full or partial use of the data to East Tennessee REALTORS®.

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