Market Stabilization Continues as Rents Cool and Home Prices Edge Up
Tennessee’s housing market is stabilizing heading into late 2025. Home prices continue to rise modestly, while rental prices have cooled after several years of strong increases. Expanding inventory and steady job growth are creating a more balanced environment across the state’s major metro areas — especially in Nashville, Knoxville, and Chattanooga.
Residential Real Estate Trends – October 2025 Snapshot
| Metric | Tennessee (Oct 2025) |
| Median Home Price | $364,900 (+3.4% YoY) |
| Home Sales (annualized) | 148,700 units (+2.3% YoY) |
| Median Days on Market | 26 days (up from 22 days a year ago) |
| Housing Supply | 3.2 months (vs 2.7 months Oct 2024) |
| Average Rent | $1,700 (–$92 YoY, –5.1%) |
| Available Rentals | ≈ 15,943 statewide (Zillow) |
Home Prices Rise Steadily Across Key Metros
Home prices in Tennessee continue to rise at a moderate pace. The statewide median home price now stands at $364K, up 3.4% year-over-year.
Despite higher mortgage rates, demand remains solid thanks to in-migration from higher-cost states and expanding job opportunities in healthcare, manufacturing, and logistics.
Inventory has improved slightly, reaching 3.2 months of supply, giving buyers more flexibility while preventing oversupply. Homes are selling in about 26 days, with well-priced listings still moving quickly.
Rental Market – Prices Ease but Demand Remains Strong
According to Zillow Rentals (Nov 2025), the average rent across Tennessee is $1,700, down $92 from last year (–5.1%).
- Month-over-month change: –$25
- Year-over-year change: –$92
- Available rentals: ~15,943 listings statewide
This marks one of the most significant rent corrections in the Southeast region, bringing relief to tenants after several years of rapid increases. The drop reflects increased multifamily construction and shifting demand toward suburban areas.
Regional Highlights:
- Nashville: Avg. rent ≈ $2,000 (–4.5% YoY); high supply of new apartments moderating rent growth.
- Knoxville: Avg. rent ≈ $1,750 (–3.0% YoY); demand remains steady from university and healthcare workers.
- Chattanooga: Avg. rent ≈ $1,680 (flat YoY); balanced market with limited new supply.
- Memphis: Avg. rent ≈ $1,550 (–2.0% YoY); steady demand from logistics and industrial sectors.
💡 Landlord Tip: With rent declines leveling off, focusing on tenant satisfaction, property upkeep, and renewal incentives can help maintain consistent occupancy rates in 2026.
Investor Activity – Long-Term Growth and Affordability Appeal
Tennessee remains one of the most attractive states for investors seeking strong rental yields and long-term appreciation potential.
- Investor share: ≈ 18% of transactions statewide (Q3 2025)
- Top markets: Nashville, Knoxville, Murfreesboro, and Chattanooga
- Typical investment: Single-family homes under $400K or mid-size multifamily properties
- Investor focus: Suburban build-to-rent developments and long-term hold strategies
Affordability, population growth, and a business-friendly tax climate continue to position Tennessee as a top destination for out-of-state investors.
City-Specific Market Highlights – Fall 2025
| City | Median Price | Avg. Rent | Key Insight |
| Nashville | $470K (+3.9%) | $2,000 (–4.5%) | Rent softens amid apartment surge; sales stay strong. |
| Knoxville | $375K (+3.2%) | $1,750 (–3.0%) | Balanced demand; university sector drives stability. |
| Memphis | $320K (+3.0%) | $1,550 (–2.0%) | Affordable housing keeps investor interest high. |
| Chattanooga | $350K (+3.4%) | $1,680 (flat) | Market steady; limited new multifamily supply. |
| Murfreesboro | $410K (+3.8%) | $1,850 (–1.5%) | Continued population inflow from Nashville suburbs. |
| Franklin | $525K (+3.5%) | $2,300 (–2.0%) | High-end market stable; family demand strong. |
Mortgage Rates and Affordability – Fall 2025 Overview
Mortgage rates remain elevated around 6.8%–7.0%, but Tennessee’s housing affordability continues to outperform national averages.
- Average monthly payment on a $350K loan ≈ $2,200
- First-time buyers benefit from state-backed assistance programs
- Construction permits up 4.6% YoY, particularly for townhomes and suburban developments
Policy and Economic Developments Impacting Tennessee Real Estate
- Manufacturing Expansion: New EV and logistics investments boosting employment in Chattanooga and Memphis.
- Housing Incentives: State-level support for affordable housing in growing metros.
- Short-Term Rentals: Nashville maintaining stricter permitting rules for non-owner-occupied properties.
2025 Tips for Buyers, Landlords, and Investors
For buyers: Inventory growth offers more choices; negotiate credits and rate buydowns.
For landlords: Focus on renewals and maintenance to protect returns during rent corrections.
For investors: Seek suburban and secondary markets offering high yields and population growth.
Conclusion – A Healthier, More Balanced Market for 2026
Tennessee’s Fall 2025 housing market reflects stability, resilience, and improved balance. While rents have declined modestly, home prices remain strong, and the state’s affordability continues to attract both residents and investors.
As the market transitions toward slower but sustainable growth, now is the ideal time to focus on long-term investment strategies and tenant retention.
Contact Intempus Property Management to learn how we can help you maximize returns and simplify property ownership across Tennessee.
Explore Real Estate Trends Across 9 States
Our full Fall 2025 Real Estate Market Update – Regional Trends Newsletter includes in-depth analysis of market conditions in:
California, Florida, Ohio, Tennessee, Indiana, Nevada, South Carolina, Georgia, and Virginia.
📥 Download the PDF Newsletter Now to compare regional performance, track rental trends, and access expert insights.
Sources: Local REALTOR® associations and industry reports, Zillow Rental Data, Redfin Research, and state-specific market analyses
