Nashville's Real Estate Market Is In A Balancing Act [January 2025 Market Update]

January Market Stats

January Key Takeaways

📈 – Inventory is rising, but new listings are slowing – While total inventory climbed to 2,915 homes, new listings dipped slightly compared to last year.

🏠 – Home prices are still climbing, but at a slower pace – The median home price hit $495,000, up 5.7% from last year, while the average price stayed flat.

🤝 – Buyers are getting back in the game – New under-contract listings increased from January 2024, hinting that buyers are adapting to higher rates rather than sitting on the sidelines.

👀 – Affordability is taking a hit – Higher home prices plus mortgage rates creeping up to 6.96% mean the average buyer is now paying $2,624 per month, an 8.12% increase over last year.

December In-Depth Analysis

Supply-Side:

January’s supply side numbers tell a pretty interesting story – one that might make both buyers and sellers raise an eyebrow. First off, new listings came in at 1,134 this year, a slight dip from 1,158 in January 2024 and 1,134 in 2023. (See chart below).

In other words, fewer homeowners are raising their hands to sell, which might be a sign of uncertainty or folks still holding onto those golden handcuff mortgage rates.

One thing to note is that since we’re only looking at January 2025, we don’t have a crystal ball to predict how many homes will be listed by year’s end.

But what we can say is that the total number of new listings in 2024 outpaced 2023.

The real question is whether that trend will continue into 2025. If inventory keeps building like it did last year, buyers could see more choices and possibly more negotiating power. But if new listings start to tighten, competition could heat up again.

Now, let’s talk total inventory, because this is where things get spicy. In January 2025, total inventory climbed to 2,915, a noticeable jump from 2,570 last year and 2,516 the year before. (See chart below).

What does that mean? Homes are sitting on the market longer, which hints that buyer demand may not be keeping up. This could be a side effect of higher interest rates, affordability challenges, or just buyers being extra picky.

Either way, the growing inventory gives buyers more options while sellers may need to be a bit more competitive – either in pricing or in making their homes shine.

So, what’s the takeaway? While fewer new listings mean less fresh inventory, the fact that total inventory is up suggests we’re moving toward a more balanced (or even buyer-friendly) market.

If you’re thinking of selling, pricing strategically is key. And if you’re buying? More options, more negotiating power. Gotta love a market with a little drama!

Demand-Side:

On the demand side, things are starting to look a little more interesting. New Under Contract listings in January 2025 came in at 667, which is not only a bump from 619 in January 2024 but also slightly ahead of 674 in 2023. (See chart below).

That suggests buyers might be waking up from their rate-induced hibernation and getting back in the game.

Closings, on the other hand, tell a slightly different story. January 2025 saw 451 homes officially sold, down from 457 last year but still an improvement from 412 in January 2023. (See chart below).

In short, deals are getting done, but we’re not seeing a massive uptick in closed transactions just yet.

Since we’re only in January, we obviously don’t have a full-year projection, but looking back, 2024 underperformed 2023 in total closings – 8,059 versus 8,284. That’s still a solid year, especially considering rates were consistently higher in 2024. This suggests that despite the challenges of affordability, buyers were still willing to make moves.

Whether that momentum carries into 2025 will depend a lot on interest rates and inventory levels, but so far, it looks like demand isn’t rolling over – it’s just adapting. (See chart below).

Supply vs Demand:

The "Felix Market Meter" is starting to heat up slightly compared to December 2024. We are still well within neutral territory but if prior years are any indication, the market should continue to heat up as we enter the Spring selling season!

January 2025’s Months of Supply came in at 5.85, meaning if no new homes hit the market, it would take just under six months to sell through all the current listings. (See chart below).

That’s a far cry from the ultra-competitive seller’s market we saw in years past, but it’s also not quite a full-blown buyer’s paradise.

Historically, anything under 3 months is a strong seller’s market, while over 6 months is when buyers really start calling the shots. With that in mind, we’re toeing the line but still a few listings shy of a market where buyers hold all the power.

Days on Market – which tells us how long homes are lingering before finding a buyer – came in slightly lower compared to 2023 and 2024.

This stat can be misleading as Listing Agents regularly "refresh" a listing by pulling it from the market and re-listing it thus resetting the Days on Market shown.

Home Prices:

Alright folks, let’s talk numbers – but don’t worry, I promise to keep it interesting!

If you’ve been eyeing the Nashville real estate market, you’ll be happy (or maybe shocked) to hear that in January 2025, the median home price in Davidson County hit $495,000. That’s up 5.7% from January 2024’s $472,990.

So yes, home values are still climbing – though not at the breakneck speed we saw in past years.

Now, here’s where things get interesting. The average home price in January 2025 came in at $695,997, basically flat from last year’s $695,846.

Mortgage Rates:

Mortgage rates in January 2025 stood at 6.96%, creeping up by 0.32% from 6.64% in January 2024.

If you’re getting déjà vu, you’re not alone – mortgage rates have been bouncing around between 6% to 7.5% for the last few years.

Higher rates mean affordability challenges for buyers, but on the flip side, they help cool down bidding wars (so it’s not all bad news).

Thinking about waiting for rates to drop? Well, no one has a crystal ball, but refinancing later is always an option. For now, savvy buyers are factoring these rates into their budgets, while sellers are adjusting pricing strategies accordingly.

Affordability Check-In:

Let’s just say it’s not getting any cheaper to buy a home.

With the median home price in Nashville rising to $495,000 in January 2025 and mortgage rates hitting 6.96%, affordability has taken a serious hit.

If you’re planning to buy with a mortgage, brace yourself – the typical monthly payment has climbed to $2,624, an 8.12% increase over 2024 and 6.87% higher than in 2023. That’s an extra few hundred bucks a month for the exact same house.

And if that wasn’t enough, the total interest paid over the life of the loan has also surged, reaching $548,629 in 2025 – 10.79% higher than in 2024. Translation? Today’s buyers are handing over a lot more in interest than just a couple of years ago.

Now, don’t panic – homeownership is still one of the best long-term investments, but higher prices and rising rates mean affordability is becoming a bigger challenge.

About Felix Homes

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If you have any questions about the state of the market or the home buying/selling process, please feel free to contact us at contact@felixhomes.com or 615-354-5731.