TENNESSEE HOUSING DEVELOPMENT AGENCY
THDA’s annual Housing Market at a Glance is out, showing that home prices in Williamson County are a whopping 84% higher than the state’s second most expensive county.
With brisk job growth and public schools with a good reputation, Williamson County has the state’s highest median home price, $419,000. Wilson County also is part of Middle Tennessee’s job and growth boom, but the median home price there is $254,950, second in the state.
Tennessee’s median home price grew by 5.4 percent in 2016, reaching a record $185,000, and the annual growth rate accelerated to more than 7.7 percent in the first half of 2017.
That put Tennessee in 16th place among states for home appreciation. Washington state led the country in appreciation, with 12.4% from the second quarter of 2016 to the second quarter of 2017. Connecticut and Vermont homes lost a bit of value during that time period.
The Williamson County number grew by 7% from 2015 to 2016 (the most recent numbers available).
“As far as home prices go, we are finally leaving those pre-recession records behind and forging into new territory,” said Hulya Arik, THDA economist and author of the report.
But that 7% increase means single-family homes are getting less affordable to people earning the county’s median income. For Williamson County, the Housing Opportunity Index (which measures the share of homes sold in an area that would have been affordable to a family earning the area median family income of the area) dropped from 27% in 2015 to 24.5% in 2016, according to the new THDA Housing Market at a Glance.
Williamson County led the state in newest housing stock, with more than 36 percent of total housing units built after 2000, followed by Fayette and Rutherford Counties. Rutherford and Williamson Counties also had the lowest percentage of housing units built before 1940. High economic growth rate and increasing job opportunities in these counties led to more people locating to those counties, which may be contributing factors to the higher rate of newer homes.
According to the report, the number of single-family homes sold in Tennessee jumped 10 percent in 2016, reaching the highest number since 2006.
“Broadly speaking, we found a lot of good news for people who already own their home and much more mixed results for Tennesseans who currently rent,” Arik said.
Among the good news, only 4.4 percent of Tennessee homeowners owned more on their mortgages than their homes are worth as of the first quarter of 2017, a sharp decline from the 6.2 percent of Tennessee homeowners who were “underwater” just one year earlier. That number reached nearly 17 percent at its peak in June 2010.
On average, 76 percent of homes sold in Tennessee in 2016 would have been affordable to a family earning the state’s median income, a slight improvement over the 75 percent for 2015.
For 2015, 36.4 percent of all Tennessee households paying rent or mortgage payments met the federal definition of “cost burdened,” meaning they paid more than 30 percent of their total household income toward housing costs. This represents more than a full percentage point decrease over the 37.5 percent average in 2014.
Among Tennessee’s renters, 45 percent of households were cost burdened in 2015, compared to 48 percent nationwide. Among Tennessee homeowners with a mortgage, 29 percent were cost burdened, compared to 32 percent nationwide.
Income growth among Tennessee’s renters has not kept pace with rent hikes. In fact, average monthly rent has continued to increase steadily since the housing market crash began in December 2007 despite the fact that average household income for Tennessee renters did not recover to pre-recession levels until 2015.
Among Tennessee’s homeowners, average household income did not recover to pre-recession levels until a year later, 2016, though the average monthly cost of homeownership remained lower than its pre-crash peak.
Privately-owned housing units authorized by building permits in 2016 in Tennessee increased by 12 percent over 2015. However, the number of building permits issued has not returned to its peak level reached in 2005.