Housing report

First Quarter Housing Report: Tennessee Market Sees “Most Positive Results”

For the first quarter of 2022, Tennessee saw mostly positive results, except for homeowner vacancy rates and foreclosure rates.

Tennesseans are finding jobs at an increasing rate during the recovery, with weekly jobless claims dropping 66.59% from a year ago. Non-agricultural employment increased by 4.92% per year and 2.41% per quarter. The unemployment rate fell by 1.67 percentage point over the year to 3.37% against 5.03% and 0.63 percentage point over the quarter. The goods-producing, manufacturing and service-providing sectors all recorded annual growth of 5.45%, 3.60% and 4.82%, respectively. Quarterly, these sectors increased by 3.73%, 1.67% and 2.16% respectively.

In addition to the promising jobs data, the housing data was mostly positive. Annual mortgage tax collections increased 15.06%, but fell 4.36% in the quarter. Receipts from real estate transfer duties followed a similar trend: receipts increased over the year by 49.16% and decreased over the quarter by 0.08%. Home prices in Tennessee continue to climb as annual house price values ​​rose 25% and rose 5.06% in the quarter. Tennessee single family and full home permits also saw positive annual and quarterly growth. Single-family permits rose 4.92% for the year and 3.5% for the quarter. Total annual permits increased by 9.49%, while quarterly growth was 6.3%.

It looks like mortgage holders are engaging in foreclosures again now that the moratorium on foreclosures has been lifted, with Tennessee seeing a 0.13 percentage point increase in foreclosures since the first quarter of 2021.

Vacancy rate

Homeowner vacancy rates increased in Tennessee, but declined in the US over the year and quarter. Tennessee homeowner vacancy rates rose 0.2% in the quarter and year. The United States saw an annual decline of 0.07% and a quarterly decline of 0.1%.

Tennessee has seen only declines in rental vacancy rates. The annual variations were a decrease of 0.4% for the annual value and a quarterly decrease of 0.6%. The United States saw an annual decline of 1% and a quarterly increase of 0.2%.

Housing construction

Tennessee and the South saw positive year-over-year changes in single-family permits (4.92% and 2.72%, respectively), while the United States saw a 2.67% decline. Quarterly changes in single-family permits were universally positive, with Tennessee recording a 3.5% increase, while the South and the United States recorded quarterly increases of 2.9% and 4%, respectively.

Multi-family permits were positive in all regions and among yearly and quarterly variations. Tennessee, the South and the United States increased in the quarter by 12.4%, 5.6% and 0.7%, respectively, while the annual increases were 38.15%, 16.86% and 19.76%, respectively.

The total number of permits followed the trend of multi-family permits in that all metrics were again positive. Tennessee, the South and the United States recorded quarterly increases of 6.3%, 4.4% and 2.9%, respectively, while the annual increases were 9.49%, 5.07% and 5.24%, respectively.

Real estate transactions and mortgages

Real estate transfer tax collections decreased slightly compared to the fourth quarter of 2021 (-0.08%), and the annual variation was (49.16%). Land transfer tax collections averaged about $29 million, while annualized collections were about $345 million.

Mortgage tax collections decreased compared to the fourth quarter of 2021 (-4.36%). The annual change was an increase of 15.06%. Average quarterly mortgage tax collections were over $12 million and annualized collections were approximately $145 million, respectively.

door-to-door sales

Closures for the Nashville, Knoxville and Memphis areas were negative compared to the fourth quarter of 2021. The Knoxville area saw the largest decline at 7.87%, the Nashville area saw a decline of 4.48 and the Memphis area saw a 3.81% drop in its closings. The annual variations were also negative for the three zones. Knoxville again saw the largest drop of 17%, Memphis saw a drop of 1.02% and Nashville saw a slight drop of 0.82% from a year ago.

Quarterly inventory changes between the three regions were also negative. Nashville saw the biggest drop of 12.77%, Knoxville saw the 5.80% drop, and Memphis saw the smallest drop of 5.50%. Annual inventory changes were mostly negative, except for the Knoxville area. Nashville inventory fell 25.91% from the first quarter of 2021, while the Memphis area saw a 5.94% decline from a year ago. The only positive last year was the annual change in Knoxville area inventory from the previous year, 13.59%.

house price

Home price inflation continues to rise for all Tennessee MSAs. In the first quarter of 2022, Jackson’s MSA saw the largest year-over-year home price increase of 27.1%, followed closely by Nashville’s MSA and Clarksville’s MSA with annual increases of 26.8% and 26.1%, respectively.

Tennessee and the United States also continue the upward trend in home prices both quarterly and annually. Tennessee saw a quarterly home price increase of 5.06% and the United States saw a 3.60% increase. Each year, Tennessee has seen a 25.2% increase in house prices, while the United States has seen a 19.5% increase.

Mortgages and foreclosures

In the first quarter of 2022, homeowners in the United States and Tennessee continued their trend of catching up on delinquent mortgages from the height of the pandemic. The United States saw a quarterly decline of 0.67% and Tennessee saw a 0.79% decline in mortgage delinquencies. Annual mortgage delinquencies also fell 1.79% in the United States and 2.28% in Tennessee.

Seizures increased quarterly and annually in the United States and Tennessee. The United States saw a quarterly and annual increase in foreclosures of 0.15%, while Tennessee saw a quarterly foreclosure rate increase of 0.12% and an annual increase of 0.13%.

Conclusion

The two aspects to note are the parallel increase in house prices with the general level of property prices and the evolution of foreclosure rates concerning unpaid mortgages. House prices in Tennessee are increasing exponentially while the United States, although growing, is increasing at a decreasing rate relative to Tennessee. Foreclosure rates are interesting for both Tennessee and the United States because while homeowners are more caught up in their mortgages than they were pre-pandemic, we are seeing foreclosure rates that are just about nearly the same as pre-pandemic levels.