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Tennessee has long been a place of growth and opportunity—but its booming housing market comes with real consequences. A new study from the Sycamore Institute highlights how soaring demand, tight supply, and shifting demographics have driven prices through the roof. Here's the lowdown—and why it matters.
1. Population Surge & Wealthy Influx
Over the last decade, Tennessee added nearly 541,000 residents between 2010–2020. Of that growth, around 309,000 people migrated from other states—especially after 2020, when the influx reached about 315,000 new residents from out-of-state, making up nearly 80% of the growth sycamoretn.org.
Many of these newcomers hail from high-income areas like California and Cook County, IL, bringing greater purchasing power—and pushing prices up where they settle .
2. Internal Shifts—Urban Exodus
At the same time, existing Tennesseans have started moving from urban centers like Nashville and Memphis out into surrounding suburbs and rural counties. These movers often bring incomes higher than the locals, spreading housing pressure deeper into less-prepared regions.
3. Housing Supply Lagging Behind
New home construction in Tennessee hit a historic low in 2011. While it rebounded to impressive permit highs in 2020–2021, construction still hasn't caught up to demand sycamoretn.org.
By 2021, the state dropped to just 1.7 months’ of homes for sale—well below the healthy market standard of about six months sycamoretn.org.
4. Prices Rising Faster Than Incomes
From 2013 to 2023:
- Median home values climbed 40%, and sales prices surged 170%
- Median household incomes only rose 14% (adjusted for inflation) sycamoretn.org
The rolling home price-to-income ratio jumped from 3.72 to 5.03—well above the affordability benchmark of 3.0 sycamoretn.org.
Renters felt it, too: lower-cost units (under $1,000/mo) dropped by nearly half, while rents above $1,500/mo increased over 700% sycamoretn.org.
By 2023, nearly 789,000 Tennessee households—almost 27%—were “cost-burdened,” meaning they spent more than 30% of their income on housing sycamoretn.org.
5. Rural Impact & Equity Concerns
The greatest affordability strains have shifted to rural and suburban counties, particularly in Middle and East Tennessee. Areas that were once priced out now face steep increases, with rural homes appreciating faster than in metro hubs sycamoretn.org.
And the burden isn’t shared equally—Black and Hispanic households face higher cost-burden rates than White households sycamoretn.org, and some Census tracts show over 70% of local families cost-burdened .
🧭 Why This Matters for You
- For homebuyers: Expect stiffer competition and fewer affordable listings—even outside major cities.
- For renters: Fewer low-cost units mean many are spending a larger share of income on housing.
- For policymakers & community advocates: Strategies to boost housing supply—especially in growing rural/suburban areas—are essential. Equitable development is key to prevent inequality gaps from widening further.
