The housing market in 2024 saw a significant downturn, with home sales hitting levels not seen since the 1990s. This drop is largely attributed to high mortgage rates and ongoing property price increases, which have kept both buyers and sellers on the sidelines. As we move into 2025, how will this sluggishness affect Williamson County, Nashville, and what does it mean for buyers and sellers in the local real estate market?

2024 Housing Market Overview: A Fresh Low

According to the National Association of Realtors, Americans sold just 4.06 million previously owned homes in 2024—marking the lowest number of home sales since 1995. This marks the third consecutive year of declining sales and a notable drop from the 6.1 million homes sold in 2021. The slowdown in activity is attributed to high mortgage rates, which hover around 7%, and elevated home prices, which continue to make it difficult for many prospective buyers to enter the market.

In the final quarter of 2024, sales saw a slight increase, running at a pace of 4.24 million in December, a 9.3% increase from the same time in 2023. While this shows signs of life in the market, the overall year-end figures tell a different story. As of December, the median national home price stood at $404,400—up 6% from the previous year. For the full year, 2024 set a new record with a median price of $407,500.

Home Prices Continue to Surge Despite Sluggish Sales

The supply of homes in the U.S. remains tight, with inventory unable to meet the growing demand. This shortage of available homes continues to push prices higher. In fact, if sales continue at the pace seen in December 2024, it would take just 3.3 months to exhaust the current inventory—half the long-standing average of six months.

The combination of high mortgage rates and high home prices has made homeownership less affordable than ever before. Dan Richards, president of Flyhomes Mortgage, puts it succinctly: “The bottom line is that the total cost of homeownership is higher than it has ever been.” With mortgage rates reaching record highs and home prices continuing to climb, many potential buyers are finding themselves priced out of the market.

Mortgage Rates and Market Conditions in 2025

As we enter 2025, mortgage rates remain a major concern for homebuyers. Early in the year, rates have risen in each of the first three weeks of January, hovering near 7%. Many experts predict that inflation and government policies will continue to place upward pressure on borrowing costs, keeping mortgage rates elevated. This is likely to keep the housing market under pressure for the foreseeable future.

The Redfin Homebuyer Demand Index, which tracks activity such as property tours and buyer services, has fallen to its lowest level since June. The number of days homes are staying on the market has also increased. As of January, homes are taking an average of 52 days to sell, the longest in two years. While the market remains tough, some experts, like Richards from Flyhomes, believe the housing market may pick up as buyers and sellers gradually adjust to the new, less-affordable reality.

Shifting Sentiment: How Buyers and Sellers Are Reacting

Consumer sentiment around homebuying remains cautious. The Fannie Mae Home Purchase Sentiment Index fell in December, signaling that fewer consumers are feeling optimistic about the current housing market. However, it’s important to note that this figure was still higher than in December 2023, suggesting a slow but steady shift toward acceptance of the new market conditions.

Despite the challenges, there’s a growing optimism that homebuying activity may rebound in 2025 as both practical and psychological shifts take place. Mortgage rates in the 6-7% range may start to feel more “normal” as the market adjusts, with buyers and sellers finding ways to navigate the higher costs.

What Does This Mean for Williamson County, Nashville?

For those in Williamson County and the broader Nashville area, the trends seen on a national scale are also reflected locally. With limited inventory and rising prices, homes in desirable communities like Franklin, Brentwood, and Nolensville are continuing to see competitive bidding, even as the number of home sales declines.

Buyers in Williamson County will need to be prepared for a highly competitive market. It’s important to work with an experienced realtor who can help navigate the complexities of high home prices and rising interest rates. Sellers, on the other hand, may still find success if they price their homes strategically, though they will need to be prepared for longer timelines than they might have experienced in previous years.

For both buyers and sellers in Williamson County, Nashville, staying informed about market trends, mortgage rates, and home inventory is key to making smart decisions. As the market evolves in 2025, there may be opportunities for those willing to adapt to the new landscape.

The Bottom Line: Adjusting to a New Reality

While 2024 was a year of significant slowdowns, Nashville’s real estate market remains resilient. With prices continuing to rise and inventory staying low, 2025 will likely bring more of the same for Williamson County. Buyers and sellers will need to adjust to the current market conditions, keeping a close eye on mortgage rates and inventory levels to make informed decisions.

For potential buyers, it’s critical to work with a local realtor who understands the Williamson County market and can help you navigate the challenges ahead. For sellers, pricing and patience will be key to successfully navigating this evolving market.