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Average mortgage payment for Knoxville listings increases by almost $1,000 a month

The Knoxville Area Association of Realtors said, before this year, the average monthly mortgage payment hovered around $1,200. Now, it's $2,306

KNOXVILLE, Tenn. — The Knoxville Area Association of Realtors said homebuyers will pay around $1,000 more per month in their mortgage payments on average, because of higher interest rates this year. 

Hancen Sale, the Government Affairs and Policy Director of the Knoxville Area Association of Realtors, said the median principal and interest payment has increased from around $1,214 in 2020 and 2021 — to $2,306.97 as of November 2022. 

"A lot of the locals have been priced out of the market," Sale said. "It's a tough pill to swallow for home buyers and home sellers." 

A buyer who could afford a $300,000 home in November 2021 can now afford a $188,000 home, according to the average interest rate provided by Freddie Mac. 

Local realtor Suzy Trotta said the increased price of homes and higher interest rates have made potential home buyers reconsider whether to put money down on a home.

"We're not seeing the same situations where you have 18 to 30 offers on one house," Trotta said. "The market is normalizing, the sky is not falling." 

Trotta said, in normal years, interest in the housing market fluctuated seasonally. After the pandemic, she said low-interest rates meant the market was hot year-round. 

"I expect it to go back to seasonal norms," Trotta said. "November, December, January are slow." 

Both Trotta and Sale said it's become more difficult for people who live in Knoxville to afford new houses. Sale said you have to make around $74,000 a year to afford a median-priced house in Knoxville, assuming you're able to put 20% down. 

However, Trotta said out-of-state movers will maintain current prices. 

"So many people want to move here from out of state," Trotta said. "It's a great place to live and the secret's gotten out." 

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