Murfreesboro Home Buying Power Dropped 6% Since February

Have buyers in Rutherford County left the market? That is a great question and one we are going to look at today on the Murfreesboro Real Estate Report. I am John Turner, team leader of the Turner Victory Team at Onward Real Estate. We bring this report to you every week, covering not only Murfreesboro but all of Rutherford County, so Smyrna, La Vergne, Eagleville, Lascassas, Rockvale, and all points in between.

We start each week with three things you need to know. The first is that question about buyers. Our pending home sales this year were way up. In June we were up 25%. But this week, year over year, we are down. Last year at this same week we had 124 homes go under contract. This week we had 76. That may indicate some buyers stepping back, and it may have something to do with mortgage rates.

The second thing is the mortgage rates themselves. Back on February 26 the 30-year average fixed rate was 5.98%, and that really kicked off a strong spring and summer compared to previous years. This week the rate is 6.58%. On the median Rutherford County home price, which for June was $450,000, that difference works out to about $150 a month if nothing else changes, assuming 10% down. The interesting thing is that even though rates have gone up, they are still lower than they were in July of last year. Last year they were 6.74%, so that same house would cost about $50 more a month than it does now, and about $200 more a month than if you had bought in February at 5.98%.

The third thing is that you should not use comps alone to price your house. So many times we do that. The house next door sold for this, so this is what I want to sell for. There is a lot more you need to pay attention to. You need to look at your competition. If the home next door sold for $450,000 but your neighbor with a house just like yours has it priced at $425,000, that is your competition. It does not matter that one sold six months ago. You also have to look at everything else going on in the market. A house that sold in February or March, when someone could get a 5.98% rate, may have brought more at that time than a house right now where it is costing that buyer $150 more a month.

Looking at our snapshot, the Turner Victory Team Market Health Score is at 41. Last week it was 43. Not that long ago we were slightly above 50. The way we calculate it, 50 is a very balanced market. Below 50 favors buyers, above 50 favors sellers. Right now we have definitely slid more toward a buyer’s market. We have 1,669 available homes on the market, a little over three and a half months of supply, and as of Thursday the 30-year rate is 6.58%.

Of those 1,669 homes, 35% are new construction. Buyers, there are opportunities there and builders are offering some really good incentives. Sellers, you are competing against new construction. If one of every three homes on the market is new construction, someone looking at three houses is probably walking into a model home. You have to ask yourself whether your home looks like a model home. I know you have to live in your home. I know it is difficult. But that is your competition.

Below $500,000 is still pretty active, especially below $400,000, where we have less than two and a half months of supply. That still leans toward a seller’s market. From $400,000 to $500,000 we are getting closer to balanced, and basically anything from half a million up to a million and a half is balanced right now, with some approaching what we would call a buyer’s market.

On inventory, our levels are higher than they have been in quite some time. We have 1,669 homes now. This time last year we had about 1,540. Back in 2024 there were only about 1,100. So we have more than 500 additional homes on the market compared to the same week two years ago. That is a huge increase. Buyers, you have a lot more choices. Sellers, there are still buyers out there but they have so much more to look at.

Month supply has held fairly steady even with more inventory, and the reason is that we have had decent closings over the past few months. I will submit to you that if pendings continue to slow, that month supply will start rising, and probably fairly quickly. The other thing keeping us from a big decrease in prices is new listings. Compared to 2025 we have been running below, and especially these past three or four weeks we have really dropped off. Inventory is building, but it could be building quicker.

On pendings, a few weeks ago we had a nice bump. We talked about June outpacing last year. Then we saw it drop off. The question was whether it would rise back up after the Fourth of July. Not only has it not risen, it has dropped the past three weeks fairly significantly. My guess is that if mortgage rates stay where they are, we see a few more weeks of pendings staying lower. But my crystal ball is cracked. My predictions are not always correct. I do like looking at trends and I think they give us insight.

On the speed of the market, nearly 33% of all homes that go under contract do so in that first week. In the $400,000 to $500,000 price range, looking at true original list price, a home that went under contract in the first seven days got about 99.5% of asking. Between eight and 89 days it brought about 96.5%. Past 90 days, if it went under contract at all, it brought about 93.5% of the original asking price.

On showings, if you are in the $300,000 to $400,000 range you are getting about two and three quarter showings per week. Anything outside that is dancing on either side of one. In the $500,000 to $600,000 range you are getting about half a showing a week on average. We peaked several weeks ago at 2.38 showings per week across the board, and now we are at 1.35. Our showings have been cut roughly in half from the peak earlier this year.

Here is an interesting stat about the purchasing power of the median home price in Rutherford County. If in February you were able to buy a $450,000 house, using all the same criteria, the same income, all of it, changing only the interest rate, today you can afford a home about $29,000 less. So that is roughly a $421,000 house.

Now remember that chart about price reductions and going over 90 days. A home that has been on the market over 90 days, if it sells, is selling for about six and a half percent less than what it was originally listed at, which coincidentally is also about $29,000 less. Is that a true dollar for dollar correlation? I do not know. It could be coincidence. I think it is more than coincidence. The point is that as a seller you have to look at all these things and understand why people got $450,000 for their house back in February or March. The mortgage rates were lower.

You can ask whatever you want for your house. But what we are seeing right now is half as many showings as there have been, which means there are fewer buyers out there. We have pendings trending down, probably a lot of it related to mortgage rates, because homes become less affordable each time the rate goes up. So if you are a seller and you need to sell or really want to sell, you need to take all of that into consideration when you price. Do not just get stuck on the comp and what your neighbor sold for four or six months ago, because those were different market conditions than what we have now.

That is the reason we track this information every week. The real estate market changes. It is not a drastic change every week, but as you watch it every week you start seeing the trends. Right now our market is trending down. A little drop in mortgage rates could change that just like that. Traditionally this is also where everybody is getting ready for school and we start heading toward the end of summer. Our market has traditionally dropped off then as well. But a couple of years ago we saw it really jump in October and November, which traditionally it does not, because mortgage rates had dropped about half a percent to three quarters of a percent, and that gave a big bump in buyers coming out.

So pay attention to this. As a seller right now you have to look at the market, look at your competition, look at your potential buyers, and be realistic. The good news for buyers is that you have some leverage, and each day that goes by with rates staying up, that is a little more leverage for you. Whether you are buying or selling in Rutherford County or anywhere in Middle Tennessee, our team can help. I am John Turner with the Turner Victory Team at Onward Real Estate. Until next week, make it a great week.