Buying a house in Nashville
Want to live in the hometown of country music? You’re not the only one. Nashville, otherwise known as Music City, had the third-highest increase of residents in the country between January 2021 and March 2022, according to a report from moving company PODS. If you’re interested in purchasing a home here, be prepared, because prices remain strong even while real estate markets around much of the country are cooling. The median sale price of a home in Nashville as of March 2023 was $431,000, according to Redfin — well above the national median of $375,700. Read on for everything you need to know about buying a home in Nashville.
Deciding where to live in Nashville
Like many other major cities, Nashville is made up of a variety of unique neighborhoods, each with its own characteristics and amenities. Downtown is one of the most popular places to live thanks to the nonstop entertainment, as well as the variety of restaurants and proximity to many of the city’s employers. The Gulch is another trendy neighborhood, with high-rise apartments and condominiums that attract young professionals, as is historic Germantown, known for its chic restaurants and cafes.
Home prices can vary greatly from one neighborhood to another, so it’s smart to enlist a real estate agent who knows the area you’re looking in well. And if you’re moving here from another city, Bankrate’s cost of living calculator can help you determine how much more, or less, your daily essentials will cost you in Music City.
How to buy a house in Nashville
Save for a down payment
The general rule of thumb when buying a home calls for making a 20 percent down payment when buying a home. That’s a lot of money — 20 percent of a median-priced $431,000 Nashville home is more than $86,000. But in reality, paying a full 20 percent upfront is not always necessary. Using a conventional loan, buyers might need just 3 to 5 percent of a home’s purchase price. Your specific down payment requirement will depend on your mortgage loan, home price and financial profile.
Find the right lender and get preapproved for a mortgage
While you may be eager to begin home shopping in Nashville, it’s smart to get preapproved for a mortgage first. Taking this step allows you to conduct a more informed home search, knowing what your budget parameters are. This step also tells home sellers that you are serious about making a purchase, and qualified to do so.
Remember, though, that mortgage preapproval is not the same as final approval. Once you go into contract on a home, you’ll have to apply for an official mortgage loan, which is a separate process.
Find the best Nashville real estate agent
Finding a real estate agent who knows the Nashville market inside and out can make a big difference in your homebuying process. An experienced agent can help identify neighborhoods and homes that are a good fit for your needs, lifestyle and budget. In addition, an agent will have access to Nashville’s local multiple listing service (MLS), which is a database listing all of the properties for sale.
If you’re not sure where to start, ask friends and family for recommendations, and check out “for sale” signs in neighborhoods you’re interested in. Interview several candidates before you choose the right one for you — you want someone who you really click with. It’s also a good idea to research the agent’s online presence and read reviews from past clients.
Start house hunting and make an offer
Now comes the fun part: house hunting. Your agent will show you available homes that match your needs and your budget. With your preapproval in-hand, you should be able to act quickly when you find one you love. Here too, your agent will be critical, helping you to make an offer that will be taken seriously by the seller. The Nashville market remains somewhat competitive, according to Redfin, with homes receiving two offers on average. But note that 22.8 percent of sellers had to drop their price in order to close a deal in March 2023, so you may have some room to negotiate.
Get a home inspection and appraisal
During the height of the pandemic, when markets around the country were red hot and bidding wars were commonplace, it was not unusual for prospective buyers to forgo home inspections. These days, buyers no longer need to skip this step: Scheduling an inspection before finalizing such a significant purchase is a wise move. It can uncover unknown issues with a property that might impact your decision to buy, or that you may want to ask the seller to address either by making repairs or covering the cost.
If you’re financing your purchase with a mortgage, the lender will require a home appraisal as well. This protects them by ensuring that the home is worth at least the amount they’re lending you to buy it.
Requirements to buy a house in Nashville
Can I afford a house in Nashville?
With its mix of music, entertainment and a growing job market, Nashville is a desirable place to live. And the median home price of $431,000 reflects that — it’s about $55,000 higher than the national median.
However, prices in the city have declined 2 percent since March of last year, and home sales are slowing as well, down 7.7 percent year-over-year. In addition, homes are sitting on the market for longer: 53 days, which is 32 days longer than last year. All of these factors make it a more favorable buying market than it was in 2022, though interest rates are certainly higher.
Deciding whether you can afford to buy a home should be based mostly on your personal financial circumstances. To help get a better sense of what you might be able to afford and what your monthly mortgage payments might be at today’s rates, use Bankrate’s mortgage calculator to crunch the numbers.
First-time homebuyers in Nashville
Buying your first home is both exciting and intimidating. There are many financial assistance programs available for first-time Tennessee homebuyers, so be sure to investigate your options. Down payment and closing cost assistance programs are also available at the federal, state and local level, and many private lenders offer programs for first-time buyers as well. Consult with your lender and your real estate agent about what you might be eligible for.
FAQs
-
Yes, home prices here are more expensive than much of the rest of the nation. The city’s median sale price is $431,000, per Redfin data, which is about $55,000 higher than the National Association of Realtors’ nationwide median price of $375,700.
-
They are, but not by much. Redfin data shows that prices in Nashville dropped 2 percent between March 2022 and March 2023, from $440,000 to $431,000. The number of homes also dropped by 7.7 percent in the same time frame.
You may also like
Cost to sell a house in North Carolina
Cost to buy a house in Georgia
Nashville housing market: Everything you need to know