As Nashville rents soar, will more buy homes?

Record-high Nashville apartment rates have many weighing costs of homeownership

Consider Chris and Kim Lockard, a couple about to buy a home in Nashville’s Crieve Hall neighborhood. After comparing monthly costs of buying versus renting, they’re ready to take the ownership plunge and move into a house with a backyard for their two border collies.

Chris and Kim Lockard can't wait to move into their new Crieve Hall home at the end of July. Their monthly mortgage payment will be $100 less than they had been paying to rent a town house. Photo credit: GEORGE WALKER IV / THE TENNESSEAN

Chris and Kim Lockard can't wait to move into their new Crieve Hall home at the end of July. Their monthly mortgage payment will be $100 less than they had been paying to rent a town house. Photo credit: GEORGE WALKER IV / THE TENNESSEAN

Or Melissa Gordon, who three weeks ago left a one-bedroom Brentwood apartment ahead of a $42 monthly rent increase to move to a three-bedroom house near downtown Nashville.

“It just made more sense to make that investment and move into a house,” said Gordon, who says she finds it acceptable to pay about $50 more a month to become a homeowner rather than deal with rising rents.

Average apartment rental rates in the Nashville area rose to an all-time high of $816 a month at midyear, and the trend has begun to tempt more longtime renters to consider buying. Doug Walker, vice president at Brentwood-based Churchill Mortgage, said his loan pipeline is suddenly filling up with first-time buyers as the mathematics of buying vs. renting plays out.

In recent months, the median sales price of single-family homes in the Nashville area has actually crept up and stood at $182,000 for June.

But rental rates also are rising, jumping 3.3 percent during April-June compared with the first three months of this year, according to the Greater Nashville Apartment Association. That comes after rents had stayed flat at about $790 a month (taking into account one-, two- and three-bedrooms units) for nearly a year.

A Moody Analytics researcher, studying Nashville’s real estate data for January-March, said it still costs a bit more per month to own rather than rent, and that’s probably because Middle Tennessee wasn’t hit as hard as some other parts of the country by loan foreclosures and collapsing home prices.

It is “a reflection of what home prices have done in the last couple of years in Nashville — fallen, but not as much as across other areas of the country,” said Alex Miron, an economist with Moody’s Analytics. He said if rents continue to rise over time, though, it will make the relative cost of buying a house more attractive.

Source: The Tennessean

About Sutton Lipman

Sutton Lipman Costanza is a native Nashvillian and a second generation REALTOR. She is excited and proud to be a part of The Lipman Group Sotheby’s International Realty team. Sutton graduated with a Bachelor of Arts degree from The George Washington University. Before selling real estate, she worked at Centerstone, a community-based behavioral health care organization in Nashville. In her free time, Sutton enjoys spending time with her family and friends, traveling, practicing Spanish, knitting and playing tennis. sutton.lipman@sothebysrealty.com or 615.438.6149
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