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.
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