Mortgage Rates Drop Below 6%: What This Means for Middle Tennessee Buyers

There’s been a meaningful shift in the housing market across Middle Tennessee — and this one may actually matter for buyers and homeowners.

Mortgage rates have recently dipped below 6% on average, improving affordability compared to the 7%+ rates many buyers faced last year.

While a 1% change in rate may not sound dramatic, it makes a real difference in monthly payments — and that can widen opportunities.

Here’s a practical example:

On a $400,000 loan:

• At 7%, principal and interest is roughly $2,105 per month
• At under 6%, that payment drops to about $1,916 per month

That’s nearly $200 per month in savings, or about $2,400 per year — without changing the purchase price. This improvement boosts buying power and can help some buyers qualify when they couldn’t before.

Across Middle Tennessee — including Nashville and surrounding communities — home prices have remained elevated but relatively stable compared to a year ago. For example:

• The median home sale price in Davidson County (Nashville) is around $537,000 with active listings near current lows and homes spending about 84 days on market.
• Statewide data shows the median home sale price in Tennessee near the $385,800–$415,000 range depending on source, and inventory sits around 6 months of supply, which is generally considered balanced.

These figures reflect a region that has shifted toward a more balanced market, with more options for buyers without the intense competition of the past few years.

As rates come down:

• Buyer activity is becoming more consistent
• Refinancing inquiries are increasing
• People who paused their search last year are reengaging

This feels more like a balanced market than a frenzy — which often leads to smarter, less stressful buying decisions.

Middle Tennessee continues to remain attractive due to:

• Strong job and population growth
• No state income tax
• A wide range of lifestyle markets — from urban Nashville to quieter suburbs

When mortgage rates improve and inventory stabilizes, buyers can act with more confidence — not just urgency.

Small adjustments in interest rates can have a meaningful effect on affordability and buying power. While we’re not in a frenzy market, the current conditions are creating opportunity and clarity where there had been uncertainty.

If you’ve been watching the housing landscape and wondering what this means for your plans — whether buying, selling, or refinancing — I’m happy to help you understand the numbers in your specific situation.