Nashville, Tennessee Real Estate Market Update - 2025 Q1

The Nashville housing market is cooling down after a few years of high growth.

Nashville’s real estate landscape kicked off 2025 with signals of a changing tide. The red-hot growth that characterized the market over the past few years has cooled, but not stalled. As higher mortgage rates and affordability constraints take hold, the city’s housing scene is beginning to show signs of stabilization — and perhaps a healthier balance between buyers and sellers.

🏡 Nashville Housing Market: Growth Still Standing, But Slowing Down

The median home price in Nashville hit $510,000 in Q1 2025, a 2.5% increase from the same time last year. While that may still sound like solid growth, it’s a noticeable drop from the nearly 9% gains seen just one year earlier. The climb in prices is slowing — and it’s giving some buyers a breather.

That said, monthly payments continue to climb due to elevated interest rates. With average mortgage rates hovering around 6.8%, Nashville buyers are now spending about $2,624 per month to finance a median-priced home — up more than 8% from early 2024. For many households, the rising cost of borrowing is dampening purchasing power.

📦 Housing Inventory Up in Nashville, But Buyers Still Face Headwinds

One bright spot in Q1 was inventory. The number of homes on the market jumped by over 30% compared to this time last year, giving buyers more selection than they've seen in years. In February alone, 678 homes went under contract — an improvement from early 2024, though still short of pre-pandemic norms.

Despite this, Nashville is far from being a buyer’s market. Sellers continue to hold a mild advantage, though power dynamics are beginning to even out. In many cases, buyers are now negotiating with more leverage than they’ve had in the recent past.

💰 Affordability Gap Widens in Nashville

Affordability remains a stubborn challenge in Music City. A home priced at the current median now requires a household income of around $120,000 to be comfortably affordable — far beyond the city’s median income. This growing gap is pricing out many would-be buyers and pushing them into the rental market or forcing them to consider outlying suburbs.

Unless wage growth keeps pace or mortgage rates ease, affordability will likely remain a key barrier for entry into Nashville’s homeownership market.

🏙️ Multifamily Markets Plateauing in Nashville, But Poised for a Rebound

Nashville’s apartment sector, long strained by new supply, is starting to level off. In Q1 2025, the city added about 1,450 new rental units while absorbing nearly 1,900 — a good sign that demand is catching up. Average rent held steady at $1,679, and occupancy ticked up slightly to 91.7%.

Annual rent growth was essentially flat (-0.1%), but the pause may be short-lived. As new development slows and the market digests recent additions, rents are expected to climb again by late 2025.

🚦 Infrastructure Investments: A Long-Term Game Changer for Nashville

In February, Nashville began implementing its ambitious “Choose How You Move” transit overhaul, funded by a 0.5% sales tax approved by voters in late 2024. The $3.1 billion plan is set to transform city infrastructure with better bus service, smarter traffic lights, and expanded pedestrian and bike routes.

Over time, these improvements could reshape neighborhood dynamics and boost real estate values in areas previously underserved by public transit. While it's too early to measure market impact, the groundwork is being laid for a more accessible and connected city.

 

🔮 Outlook for the Rest of 2025 for Nashville's Housing Market

As we head into midyear, Nashville’s real estate market is expected to remain steady — not spectacular. Prices may continue to rise, but slowly. The inventory boost will offer relief to buyers, though affordability issues will keep the market from overheating. Meanwhile, the multifamily and office sectors are entering a phase of cautious optimism, with a stronger footing than a year ago.

Whether you're looking to buy, sell, invest, or rent, Nashville in 2025 offers a landscape that's maturing — less frenzied, more thoughtful, and shaped by a city planning for its future.

✅ Key Highlights for Nashville's Housing Market

• Median Home Price: $510,000 (+2.5% YoY)

• Average Mortgage Payment: $2,624/month (+8.1% YoY)

• Inventory Growth: +31% YoY

• Multifamily Occupancy: 91.7%

• New Transit Initiative: Underway, $3.1B investment

How I Can Help You

When it comes time to purchase a home or refinance an existing loan, I want to help you! Hopefully articles like this give you good information and a better understanding of the mortgage world, but let me use my experience and expertise to help you with your particular situation.

I tell my clients and referral partners that a mortgage transaction starts with a simple conversation. Let’s talk about your financial situation, budget, and goals so that I can help you determine the best solution for you. During a 10-minute informal conversation, we can get you on the right path as it relates to a home purchase or mortgage refinance.