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Rent remains high, home sales are slightly up and staying on the market longer, and mortgage rates may be going down. That’s according to the most recent Market Pulse report from the Knoxville
Area Association of Realtors (KAAR).

Knoxville area home sales were up a bit in December 2022 compared to November 2022, but still remain much lower than this time last year. The housing inventory is up 85 percent from this time last year, but still remains more than 42 percent below pre-pandemic levels.

Of the homes sold, half were under contract in 16 days or less, with 23 percent of homes sold over the asking price.

As of the end of January when this report was published, mortgage rates were trending down just a bit after hitting their highest level in nearly two decades.

The publication makes sure to note: “Mortgage rate forecasts for 2023 are all over the place, but Federal Reserve Chairman Jerome Powell has consistently indicated that ongoing rate hikes will be necessary. With core inflation in December easing to its slowest pace since October 2021, overall inflation remains well above the Fed’s 2% target rate. Moreover, with the federal funds rate at the highest level in 15 years, mortgage rates are expected to remain elevated through the first half of 2023 and potentially beyond.”

The rental market in Knoxville continues to outpace the U.S. average in terms of rent price growth and occupancy. KAAR goes into detail on the renting market here, explaining how the numbers got so hight, and how more apartment units are currently under construction, which will hopefully cool down these rates.

Here are more takeaways from the January Market Pulse report:

• Knoxville ranked No. 10 among the top U.S. metros for annual job growth in 2022, with total annual employment up 4.9 percent from the previous year, according to analysis by RealPage, Inc.
• Effective rents in the Knoxville MSA were up 14.06 percent year-over-year in Q4, outpacing the 6.6 percent growth nationally. On average, effective rents are 48 percent – or $447 – higher than pre-pandemic levels.
• Out-of-town buyers as a share of all home sales have declined considerably over the past year. Buyers relocating from another area represented just 8.5 percent of all home sales, compared to 24 percent of sales in the first quarter of 2022.

You can subscribe to the monthly email from KAAR here.

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