Tennessee Housing Market Update: Why 2026 Could Be a Smart Time to Sell
The housing market has not felt this energized in quite some time, and the numbers are starting to back that up. Mortgage rates have eased from recent highs, buyer activity is picking up, and sellers who move early may benefit from renewed momentum before competition increases.
Here is what is happening behind the scenes and what it could mean for homeowners across Tennessee.
When Mortgage Rates Come Down, Buyer Activity Goes Up
Buyer demand is closely tied to mortgage rates, especially in today’s affordability focused market. Even small drops in rates tend to bring buyers back off the sidelines.
Mortgage rates have recently fallen into the low six percent range, with the average 30 year fixed rate hovering near 6.18 percent, the lowest level seen in over a year. This shift has helped improve affordability compared to earlier peaks and encouraged more buyers to start applying for home loans again.
According to the Mortgage Bankers Association, mortgage purchase applications are now at their highest levels so far this year, and overall application activity recently reached its strongest point in nearly three years. This is a clear sign buyer demand is trending in a healthier direction.
This activity has built steadily throughout the year, not just from short term factors, showing growing confidence as borrowing conditions improve.
Home Sales Are Showing Signs of Rebound
Another encouraging indicator comes from the National Association of Realtors. Pending home sales, which represent homes that are under contract, have risen and are now at their highest level of the year. Pending sales are a leading indicator, meaning they often signal where closed sales are headed in the coming months.
Because of this momentum, economists expect existing home sales nationally to increase in 2026 compared to both 2024 and 2025. Forecasts suggest that even if mortgage rates stay relatively stable, the market is positioned for gradual improvement rather than another slowdown.
What This Looks Like in Tennessee
Tennessee continues to stand out due to steady population growth, job expansion, and long term housing demand.
Home values remain stable and are rising modestly, with the statewide median home price around 364,000 dollars, up year over year.
Inventory remains limited, averaging roughly a three to three and a half month supply, which is well below the six months considered a balanced market.
While some Tennessee markets have seen homes take a bit longer to sell, demand remains strong for properties that are priced correctly and well prepared.
This combination creates opportunity for sellers who act strategically rather than waiting for conditions to change dramatically.
What This Means for You as a Seller
Selling in the current market can offer several advantages.
More buyer demand as affordability improves, leading to more showings and serious interest.
Less competition for now, since listing sooner may put you ahead of other sellers who have not yet realized the market is shifting.
Stronger positioning for homes that are priced right and presented well, even in a more balanced environment.
If you previously paused your plans because buyers seemed hesitant, this shift could be your sign to re evaluate.
Bottom Line
Momentum is building in the housing market, and Tennessee remains well positioned as buyer confidence improves heading into 2026.
I am Lisa Mason with Mason Signature Homes, brokered by Orchard, and I am here to help guide you through what this changing market means for your home and your goals. Whether you are thinking about selling soon or just want a clearer picture of your local market, I am here to help you take the next step with confidence.
