Single-family homes line one side of the 700 block of 26th Ave. N.
By James CrawfordNesting Nashville
Nationally, home prices have mostly outpaced broader consumer inflation over the past decade. This is certainly the case in Nashville. From 2010 to mid-2020 the median home price rose 61% nationally. The key reason: steadily shrinking supply coupled with steadily rising demand. Americans saw inflation of 18% and a wage hike at 30% over the same 10-year period. Yet incredibly, the percentage of income devoted to a mortgage principal and interest payment to buy a median price home is essentially unchanged, reflecting the awesome power of low mortgage rates which hit an all-time low in August and may fall even farther.
More amazingly, in the midst of a pandemic and high unemployment, home prices are setting new heights, with multiple offers seen in many properties. The rate of home sales, after plunging during the shutdowns, is poised to surpass 2019 levels in the final months of the year.
Could there be a downside to these rock-bottom rates? While its not something to worry about until 2022 or beyond, some homeowners will stay put longer than they might have as theyre disinclined to trade the lower rates for ...