KNOXVILLE, Tenn. — The East Tennessee Realtors group said apartment rents in the Knoxville area increased by around 6.06% compared to the previous year in July. Nationally, they said rent grew by 0.78% in the same timeframe — showing an increase in Knoxville-area rent that's almost eight times the national rate.
Their report said rent in the area is expected to continue increasing by an additional 5% over the next year.
In the same report, the realtor group said housing inventory in July was down from the previous year by around 9.8% and said East Tennessee home sales decreased. They said home sales were down by 14% compared to June 2023, and were down by 19.4% compared to July 2022.
The median home sales price was $350,000, an increase of around 7.9% from the previous year. They said the total number of homes available in the market was still around half of pre-pandemic levels.
"Home sales declined significantly in July largely as a result of the sharp rise in mortgage rates since mid-May. Although higher borrowing costs and uncertain economic conditions have kept many prospective buyers on the sidelines, competition remains high for the relatively small number of homes on the market," the report said.
East Tennessee Realtors said at the start of 2022, homebuyers needed an annual income of around $59,000 to qualify for a mortgage on a median-priced home. That number has ballooned to more than $110,000 per year as of August 2023.
"With interest rates elevated and house prices holding steady, a sizable share of households cannot even afford a lateral move – much less an upgrade," said the report.
They also said around 30% of homes sold for more than the asking price and new construction represented around 10.4% of total home sales.
The report also said the realty group organized a poll to understand the views of Knox County residents. It was used to inform Advance Knox, an effort to create a new land use and transportation plan that would inform the decisions of county leaders for years to come.
That poll found 67% of respondents believed housing affordability was at least a big problem in the area, and an additional 21% said it was a moderate problem. Demographics most concerned about it were residents under 50 years old and renters.