We provided some insight on the March housing market two weekends ago in our article on the Knoxville Chamber’s “ECO” report. The Knoxville Area Association of Realtors (KAAR) sent out its monthly “Market Pulse” newsletter for May, which had more details.
- The 30-year fixed mortgage rates finished 2021 at 3.11 percent. However, for the month of May, rates were above 5 percent. Rates are at their highest level since 2010.
- Knoxville’s rental occupancy rate was above the national average by 1 percent during the first quarter of the year. Occupancy rate during Q1 was 98.8 percent. Rental rates in the Knoxville Metropolitan Statistical Area (MSA), were also above the national average. As of April, the year-over-year effective rent was up 19.21 percent.
- The KAAR newsletter noted that while the housing market will continue to moderate in the coming months, a crash or significant downturn is unlikely. Why? Unlike the Great Recession, sellers aren’t faced with higher mortgage payments and don’t have an incentive to sell. The analysis suggests that there will be a tight market ahead, but there is no reason to believe home prices are at risk which is a “necessary ingredient for a bubble,” according to a newsletter.
- A report from the National Association of Realtors (NAR) said two in three renters cannot afford to buy a home. Record high home prices, rising mortgage rates, and record low inventory are creating what “Market Pulse” called the “three troubles” of the housing market that are impacting affordability.
- The newsletter also notes that a lack of affordable housing will cause issues in closing the jobs gap.
- A new section in the newsletter allows readers to send questions on the housing market to KAAR to have answered in future editions. Submit your questions here.
As the newsletter states, housing affordability and jobs are closely intertwined.