Murfreesboro Housing Market History: How We Got to Today

What is happening with the Rutherford County real estate market today? Most weeks I bring you a lot of stats and data, and I will bring some of those this week too. But what I really want to do today is more of a fireside chat. I want to talk about what is going on with the market, how we got here, and what it may look like moving forward.

I am John Turner, team leader of the Turner Victory Team at Onward Real Estate. I appreciate you tuning in to the Murfreesboro Real Estate Report, where we talk all things Rutherford County real estate, including Murfreesboro, Smyrna, La Vergne, Eagleville, and all points in between.

I have been a Realtor in Rutherford County since 2000. I grew up around this business. It has been part of my life as long as I can remember. So let me back up and talk about real estate over the past twenty years or so here in Rutherford County.

Around 2005, Rutherford County was moving along pretty well. This has always been considered one of the more affordable places to live in Middle Tennessee, and back then it definitely was. A starter home was around $100,000, which was really amazing. It was not that mortgage rates were low. Rates were around 8%. It was that the cost of building a home in Rutherford County was fairly inexpensive. Most builders were paying $22,000 or $25,000 for a building lot. Right now you will not find one under $100,000, and most of them are probably $150,000 and higher.

What we saw around 2005 and 2006 was a lot of building going on. Quite frankly we got overbuilt. Then the Great Recession hit. We could talk about all the reasons for that, but we are not going to. The market just tanked. What you may not remember is that in Rutherford County we had four years where prices declined.

If you lived through it, if you were trying to sell a house then, you remember. It was tough on me personally. I got behind on my house payment and eventually lost it, because it was worth so much less than what I paid and I could not turn around and sell it. A lot of people got hurt then.

Something you may not have realized is that a lot of builders and developers got hurt too. Builders and developers almost stopped doing anything for several of those years. I know developers in particular who lost everything they had in development, and those ended up getting foreclosed on and sold. That is actually one of the ways national builders came into Rutherford County. Before then we really did not have many national builders here. It was mainly local builders. They came into town because they bought up all these foreclosed lots, and it was an inexpensive way to get into Rutherford County.

From 2011 on, the market started recovering. People started buying houses again, even those who got hurt in 2007 and 2008. Mortgage rates started dropping. I remember when they went below 6% and we just could not believe it. We never thought we would see anything lower than that. It was a pretty good stretch. Prices rose a little faster than wages did, but the average working person in Rutherford County was still able to buy a home, and it was not a burden. For about 25% to 28% of household income you could get a fairly nice house.

Then 2020 hit. If you go back to March 2020, we had no idea what was going to happen. We were told to go home for a couple of weeks and flatten the curve. For someone who makes a living in sales, that was a scary time. We had no idea if we were going to have an income, and if we were, what it would look like.

What happened was mortgage rates dropped to around 3%, and two things followed. Anybody who had been sitting on the sideline thinking about buying a house came out to buy. There was a lot more money floating around. People were working remotely, so they were not tied to a particular area. We all remember the feeding frenzy on homes and how hard it was to buy unless you had a lot of money behind you.

But one thing we forget is that people already in a home they liked just went out and refinanced. They went from a 5% mortgage down to 3% or 2.85%. So you had two groups getting cheap money. You had the buyers, and you had current homeowners refinancing.

Fast forward to the summer of 2022. Inflation started getting out of hand, mortgage rates went up, and that took away the cheap money. But during that feeding frenzy, prices had escalated very quickly. In 2021, homes in this area went up almost 25%. Over a three year period they went up 45%. For reference, up to that point Rutherford County was seeing somewhere around 4.7% or 4.8% appreciation every year. So we had over nine years worth of appreciation in three years. Wages did not appreciate that quickly.

In summer 2022, mortgage rates went up, prices were still up, and the market just halted. I can name the day it did. Most of us thought it would be short term and rates would come back down, but it did not happen. Rates stayed elevated. At the beginning of this year the 30 year fixed average got down to 5.98%, and we really started seeing things pick up.

Remember, back in the early 2000s mortgage rates were higher than they are today. But the cost of building a home was not what it is today. Plus you have to go back to those four years where builders were not building. If you live in Rutherford County you think there is building going on everywhere, and there is too much, especially if you have been around here as long as I have. That is what I always hear. But we really were not building enough houses for all the people who wanted to buy. So when 2020 hit, that lack of inventory really hurt us, and we saw a huge increase in prices.

Builders are building now. The challenge is that land cost, lumber cost, and mortgage rates all put the price of a home where it is a lot harder for the average person to afford. Everybody thinks if mortgage rates come down that will ease this, and it will some. But it also goes back to wages not rising nearly as quickly as home prices have. We are still in that right now.

So why do I bring this up? Because 2020 and 2021 really set the tone for what we are seeing today. We did not know it at the time, but the cheap money and the fast price increases locked people in. The people who refinanced at 3% and bought their house for $200,000 in Rutherford County, where are they going to move right now, even though they have good equity? If they do not want to go up in payment, what are they going to do?

Then you have the people who bought after summer 2022, who did not get the benefit of lower mortgage rates or lower prices. They paid higher prices and higher mortgage rates. Here we are three or four years later and we have not seen the appreciation we saw before 2020. We have not seen 5% appreciation over the past three or four years. We might see 1% or 2% depending on what you want to look at. So now you have people who bought recently and may want to move for a job relocation or a life change, and they are locked in too, because they cannot turn around and sell for what they bought it for. Then you throw in the fees it costs to sell, and competing against new construction, which makes up about a third of our market right now. Those builders are offering incentives, buying down rates, giving free upgrades. There are all sorts of things they are doing because they are trying to move that product. It makes it even tougher for someone trying to resell an existing home right now.

So what does this mean to a buyer looking in Rutherford County right now? I would tell a buyer there are some opportunities out there. Builders are offering all sorts of incentives. They are paying closing costs, buying down rates, giving free upgrades. They have to move that inventory. A lot of these national builders are publicly traded, so they are trying to keep their books turning and make those numbers look good. They have incentive.

So if it is me and I am a buyer, I am doing three things. One, I am looking at new construction. Two, I am ready to jump on any house that comes on the market that is priced correctly. We can argue about what correctly means, but if you are in the market looking, you know it when you see it. Three, I am looking at anything that has been on the market over 90 days. There is a chance that seller has room. Now, if they bought since 2022 they may not have the negotiating room, because they may have to bring money to closing and may not have it. But if they have room, you certainly want to look that route, because there may be opportunities there.

If you are a seller, the first thing I will tell you is to forget about any past pricing. If you bought your house in 2018 and refinanced, do not think about what prices were at the height of the market. You have to look at what it is worth today. What are buyers willing to pay today? And remember that new construction is your competition. It is not just the house in your neighborhood. So many times we like to look at comps in our neighborhood and say this house sold for that and this one sold for that. Yes, there was a buyer for that. But in a market where things are moving slower, you have to look at what opportunities any buyer has out there, and how you position yourself against those homes.

If you bought after summer 2022 and you are a seller, you are in the tough spot. First of all, you have to decide whether you are a seller or not. Are you someone who kind of wants to sell, or are you someone who truly is a seller and wants to be in the game and get it sold? After that, you have to forget what you paid for the house. There is a chance you are going to walk away with less money than what you bought that house for. That is just the market we are in right now. If you need to sell your house, you have got to get the price you paid out of your head, because the market does not care what you paid for it. I know you do. I also know a lot of people brought a lot of money to the table when they bought recently. Maybe they sold at the height of the market and had a lot of cash to bring in. You still have to forget what you paid and think about what it is worth, and price it that way.

It really depends on whether you are motivated. If you do not have to sell and you are just testing the waters, you are probably not going to be very successful.

Let me get into a little bit of the stats. The Turner Victory Team Market Health Score is at 41, which has gone down, meaning we are trending more toward buyers. There are 1,643 homes on the market in Rutherford County, so you do have competition as a seller. Below $500,000 we are still moving, but it may not feel like it. Basically homes are coming on the market and selling in the first couple of weeks, or they are sitting for a while. The only way as a seller to change that is to look at your presentation, and if your presentation is good, look at pricing. This market is very sensitive to pricing right now.

Here are a couple of things I am paying attention to. We reached the height of the market at 1,669 active listings a few weeks ago. We are still floating around nearly as much inventory as we have had in the past four years. The weird dynamic is that our month supply is still in a place we would call a balanced market. If you are in the market you are probably going to tell me it does not feel like a balanced market, especially if you are a seller. And I agree with you.

The best way I can describe this is a restaurant. Say you have twenty tables and you know only ten customers are coming in tonight. So you take out ten tables and you look full. Then five of those people quit coming in. You are still at 50% capacity, but the number of tables in that building is so much smaller, so you are not really reaching your restaurant’s capacity.

That is what we are seeing with this market. The sales are there to an extent, but we do not have as many people trying to sell, because of that locked in effect. That keeps the month supply in an area we would call a balanced market. If we did not have that locked in effect, there would be more people trying to sell right now, but that does not mean the buyer pool would increase. That is where we would see the acceleration of month supply, and that is where we would really see downward pressure on pricing.

If you are a seller right now, you need to be thankful we are limited. Even though our inventory is up over what it has been, it is not as high as it would be under different circumstances, so the downward pressure on your price is not as much as it could be. Buyers, you are probably hoping a little more inventory comes online, but I still say there are a lot of opportunities out there for you.

Look at new listings. We continue to be well below what we were the past couple of years. We know July was up, and there was some good demand. Pending home sales were up in June. But in July this really dropped off. We noted this a couple of weeks ago, this big gap in pending home sales for July. We came back for a week and recovered to exactly what we did in 2025, so we thought maybe we were on our way. Even last week we were up over the weeks before, but down compared to 2025. Then look at this big drop. 92 pending home sales this week versus 129 this time last year.

So five out of the past six weeks our pending sales have been down over what we saw last year, and the sixth week was exactly the same. I think that trend is going to continue. I do not see anything that makes me think it is really going to pick up. The only thing would be a significant drop in mortgage rates. Besides that, I am not seeing anything on my radar that gives me hope we are going to see a change.

If you are a seller right now hoping the market is going to turn, I do not think it is. I tell people all the time my crystal ball is cracked. I could be proven wrong next week. But I am just not seeing anything in the data that gives me that hope.

Also look at showings. Every price point except below $400,000 is having less than one showing a week on average. You can see how that has dropped way off from our peak. I do not have historical data here going back before this year, so I cannot show you how it compares to past years. But that is a concern moving forward.

So when we talk about what is going on with the market, sellers, I think it is going to get tougher for you. I really do. I am not trying to be the bearer of bad news. What I am trying to say is that you need to be very aware of what is going on with the market, and decide whether you are a seller or whether you need to sit it out for a little while. Buyers, the opportunity is still there. I know mortgage rates are not quite where you want them, but there are a lot of incentives out there, and there are a lot of people who would really love to make a deal.

So let us get out there and make a deal and get you into a home. I appreciate you sitting through this. It is a little longer than some of the videos I do, but I wanted to recap where we are and put it all in perspective. We study this market every week and we appreciate you tuning in.

I am John Turner, team leader of the Turner Victory Team at Onward Real Estate. We appreciate you tuning in this week and hope to see you next week. Until then, I hope you make it a great week. Thank you.