KNOXVILLE, Tenn. — On Thursday, the Knoxville Area Association of Realtors released its monthly report on the city's housing market. Once again, they said home sales increased in August compared to the previous month, but not by as much as last year.
They said home sales increased 4.8% in August 2022. In August 2021, the increase was at 5.3%. The median price of a home was also up by 19% compared to last year — costing $325,000. They said half of the homes sold in August were under contract in eight days or less, and around 33% of homes sold over the asking price.
Homes that were newly constructed also represented around 9.5% of total home sales — indicating a possible demand for brand new homes compared to ones built several years ago. They also said that single-family home prices are around 60% higher than in 2019.
"Higher home prices and rising mortgage rates are impacting housing affordability in a substantial way, a dynamic that's pushed some buyers out of the market and created downward pressure on home sales," the report said. "As of now, declining affordability is the largest driver of housing moderation."
According to the report, investors made up around 13% of the sales market in 2021. KAAR said they tended to buy properties in areas with high incomes and strong rental demands. They also tended to buy in markets with a large density of Black households.
They also said Knoxville's rental rates were up around 19% compared to last year, far outpacing the national annual rent growth of 10.5%.
Mortgage lenders in Knox County are also getting more applications from majority-minority census tracts, KAAR said. These are areas where a racial, ethnic or religious minority makes up the majority of a district.
They said from 2019 through 2021, the total number of mortgage applications from majority-minority districts grew at more than twice the rate of majority-white areas. Since 2019, they also said white applicants accounted for around 60% of the growth in mortgage applications in majority-minority areas.
The number of Black applicants also grew by an average of 12.4% in majority-white areas, compared to just 1.5% annual growth in majority-minority areas.
So, more white applicants were applying for mortgages in areas where the majority of the population is made up of minorities. Meanwhile, more Black applicants are applying for mortgages to buy property in areas that are usually majority-white, but at a much smaller rate.
Meanwhile, KAAR said around 72% of young adults born between 1984 and 1992 in Knoxville were choosing to stay in the area. Most of the ones who left were young adults whose parents' income was in the top 20% of income distribution in Knoxville.
They also said the average Asian young adult is twice as like to move to another state compared to the average Black or white young adult born in Knoville. Nearly 40% of Hispanic children who grow up in Knoxville move away as young adults, KAAR said.
KAAR also said a new study found that the number of people moving to Knoxville was more than double the number of people moving out. Around 17% of people moving to Knoxville are from Nashville, with large numbers of people also coming from Atlanta, New York, Chicago and Charlotte.
For the second year in a row, Knoxville ranked at the top of the top 100 U.S. metro areas for affordable and available rental units per 100 households, according to another report.
However, the city still has a large gap between the number of white homeowners and the number of Black and Hispanic homeowners. It also ranked among the worst metros for transit access in the U.S.