Knoxville, TN, October 23, 2025
News Summary
The latest housing report reveals significant affordability challenges for homebuyers in East Tennessee, especially in Knox County, where only 15% of homes are affordable for median income earners. The report indicates rising home prices and increased mortgage rates, putting additional financial strain on families. With a shortfall of homes and rising costs, experts stress the urgent need for diversified housing options to address the crisis, particularly affecting minority communities.
Knoxville, TN – Homeownership Challenges and Affordability Concerns in East Tennessee Exposed by 2025 Housing Report
Homeownership continues to be a critical investment for many families, but rising costs have posed significant barriers for potential buyers in East Tennessee. The latest housing report from Stacker outlines the pressing affordability challenges, revealing that only 15% of homes on the market in Knox County are affordable for median income earners.
As of September 2025, the typical home value in the U.S. remains at $364,891, unchanged from the previous year. Coupled with a 30-year fixed mortgage rate of 6.27% as of October 16, 2025, potential homebuyers are facing elevated monthly payments that strain their budgets.
The report highlights that the Nashville-Davidson-Murfreesboro-Franklin metro area contains 19 cities among the 30 most expensive in Tennessee. Both Knoxville and the Chattanooga, TN-GA area rank tied for third with three cities each. Home prices in Nashville have seen variations, with typical home values ranging from $364,891 to a staggering $1,366,842 over recent years.
Current Affordability Issues
Homebuyers in Knox County are encountering the lowest affordability levels in decades, with experts indicating that only 15% of listed homes align with the financial capacity of families earning the median income. To afford half of the listings, families would need an income exceeding $136,000.
Moreover, renters are increasingly burdened by costs, as over half of all renters in Knox County spend more than 30% of their income on rent. A notable segment of these renters — one in four — allocate more than 50% of their income to housing expenses, which significantly impacts their overall financial well-being.
The housing inventory in East Tennessee has seen its first increase since the COVID-19 pandemic; however, there remains a shortfall of over 10,000 homes. Despite this shortfall, housing sales are projected to rise by 6% this year, indicating a transition from high demand and growth to a more balanced market. The median home prices in Tennessee have increased by 5.3% year over year, reaching $383,700.
Projected Trends and Future Outlook
Market analysts foresee a continuing rise in home prices, predicting a 2.9% increase in 2026. Rent prices are similarly projected to escalate by approximately 3.5% in 2025. Such trends emphasize the urgent need for diversified housing options.
Addressing the affordable housing crisis, particularly within minority communities in Knox County, is crucial. Presently, only 0.1% of active listings fall within the affordability range for Black households earning the median income, and about 1.3% for Hispanic and Latino households. Experts call for a variety of housing types, including smaller homes, duplexes, and apartments, to ameliorate the growing issue of housing shortages.
In light of the current housing landscape, prospective buyers are advised to prioritize their budgets and focus on affordability rather than waiting for an ideal market situation, as homes are taking longer to sell.
Summary of Key Features
- Typical home value in the U.S.: $364,891
- Current mortgage rate: 6.27%
- Affordable homes in Knox County: 15%
- Income needed to afford half of listings: Over $136,000
- Renters in Knox County spending over 30% of income: Over 50%
- Projected home price increase for 2026: 2.9%
- Projected rent increase for 2025: Approximately 3.5%
FAQ
What is the typical home value in the U.S. as of September 2025?
The typical home value in the U.S. was $364,891 as of September 2025, remaining unchanged from the previous year.
What is the current mortgage rate for a 30-year fixed loan?
The 30-year fixed mortgage rate was 6.27% as of October 16, 2025, leading to increased monthly payments.
What percentage of homes on the market in Knox County are affordable for median income earners?
Homebuyers in Knox County face the lowest affordability in decades; only 15% of homes on the market are affordable for median income earners.
How much income is needed to afford half of the listed homes?
A family would need an income of over $136,000 to afford half of the listings.
What is the projected increase in home prices for 2026?
Experts predict home prices will increase by 2.9% in 2026.
How many homes are in the housing inventory shortfall?
The housing inventory in East Tennessee has increased for the first time since the COVID-19 pandemic, but there is still a shortfall of over 10,000 homes.
Chart: Key Features of East Tennessee Housing Market
| Feature | Data |
|---|---|
| Typical Home Value (U.S.) | $364,891 |
| 30-Year Fixed Mortgage Rate | 6.27% |
| Affordable Homes (Knox County) | 15% |
| Income Needed for Half of Listings | Over $136,000 |
| Projected Home Price Increase (2026) | 2.9% |
| Projected Rent Increase (2025) | 3.5% |
| Housing Inventory Shortfall | Over 10,000 homes |
Deeper Dive: News & Info About This Topic
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Additional Resources
- Stacker: Most Expensive Homes in Tennessee
- Tennessean: Making Sense of the Housing Market
- WBIR: East Tennessee Housing Market Report
- WBBJ: Latest on West Tennessee Housing Market
- Wikipedia: Real Estate
- Encyclopedia Britannica: Real Estate
Author: STAFF HERE CHATTANOOGA WRITER
The CHATTANOOGA STAFF WRITER represents the experienced team at HEREChattanooga.com, your go-to source for actionable local news and information in Chattanooga, Hamilton County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Riverbend Festival, Chattanooga Oktoberfest, and Moon River Festival. Our coverage extends to key organizations like the Chattanooga Area Chamber of Commerce and United Way of Greater Chattanooga, plus leading businesses in manufacturing, insurance, and utilities that power the local economy such as Volkswagen Chattanooga, BlueCross BlueShield of Tennessee, and EPB. As part of the broader HERE network, including HEREBristol.com, HEREKnoxville.com, HEREMemphis.com, and HERENashville.com, we provide comprehensive, credible insights into Tennessee's dynamic landscape.
