For Q1 2022, Tennessee saw mostly positive outcomes, except for homeowner vacancy rates and foreclosure rates, according to MTSU Housing Report .
Tennesseans are finding employment at an increasing rate during the recovery as weekly unemployment claims have fallen by 66.59% from last year. Nonfarm employment rose by 4.92% annually and 2.41% quarterly. The unemployment rate fell by 1.67 percentage points over the year to 3.37% from 5.03% and 0.63 percentage points over the quarter. Goods-Producing sectors, manufacturing, and services-providing sectors all saw yearly growth of 5.45%, 3.60%, and 4.82%, respectively. Quarterly, these sectors grew by 3.73%, 1.67%, and 2.16%, respectively.
In addition to the promising employment data, data about housing was mostly positive. Yearly Mortgage tax collections grew by 15.06% but fell by 4.36% over the quarter. Real estate transfer tax revenue followed a similar trend: revenue increased over the year by 49.16% and decreased over the quarter by 0.08%. Tennessee housing prices continue to climb as yearly housing price values have increased by 25% and have increased over the quarter by 5.06%. Tennessee’s single-family and total home permits have also seen positive yearly and quarterly growth. Single-family permits increased over the year by 4.92% and 3.5% over the quarter. Yearly total permits have increased by 9.49%, while quarterly growth was 6.3%.
It appears that mortgage holders are engaging in foreclosures once again now that the moratorium on foreclosures has been lifted, as Tennessee experienced a 0.13 percentage point increase in foreclosures since Q1 2021.
Homeowner vacancy rates increased for Tennessee but fell for the United States over the year and quarter. Tennessee homeowner vacancy rates increased over the quarter and year by 0.2%. The United States saw a yearly decrease of 0.07% and a quarterly decrease of 0.1%.
Tennessee saw only decreases in rental vacancy rates. The yearly changes were a decrease of 0.4% for the annual value and a quarterly decrease of 0.6%. The United States saw a yearly decline of 1% and a quarterly increase of 0.2%.
Tennessee and the South had positive yearly changes in single-family permits (4.92% & 2.72%, respectively), while the United States saw a 2.67% decrease. Single-family permit quarterly changes were universally positive as Tennessee saw a 3.5% increase, while the South and the United States saw quarterly increases of 2.9% and 4%, respectively.
Multi-family permits were positive in all regions and among yearly and quarterly changes. Tennessee, the South, and the United States increased over the quarter by 12.4%, 5.6%, and 0.7%, respectively, while yearly increases were 38.15%, 16.86%, and 19.76%, respectively.
Total permits followed the trend of multi-family permits in that all metrics were again positive. Tennessee, the South, and The United States saw quarterly increases of 6.3%, 4.4%, and 2.9%, respectively, while yearly increases were 9.49%, 5.07%, and 5.24%, respectively.
Real Estate Transactions & Mortgages
Real estate transfer tax collections slightly decreased from the fourth quarter of 2021 (-0.08%), and the yearly change was (49.16%). Real estate transfer tax collections averaged roughly 29 million dollars, while annualized collections were approximately 345 million.
Mortgage tax collections decreased from Q4 2021 (-4.36%). The yearly change was an increase of 15.06%. The quarterly average for mortgage tax collections was over 12 million, and the annualized collections were around 145 million dollars, respectively.
Closings for the Nashville, Knoxville, and Memphis regions were negative relative to Q4 2021. The Knoxville area saw the most significant decrease of 7.87%, the Nashville area saw a decline of 4.48, and the Memphis area saw a decrease of 3.81% in its closings. Annual changes were also negative for all three areas. Knoxville again saw the most significant decrease of 17%, Memphis saw a decline of 1.02%, and Nashville saw a slight decrease of 0.82% from last year.
Quarterly changes in inventory among the three regions were also negative. Nashville saw the largest decrease of 12.77%, Knoxville saw the decrease of 5.80%, and Memphis saw the smallest drop of 5.50%. Annual inventory changes were mostly negative except for the Knoxville area. Nashville inventory fell by 25.91% from Q1 2021, while the Memphis area saw a decrease of 5.94% from last year. The only positive outcome from last year was the Knoxville area’s annual inventory change from the previous year, 13.59%.
Rising home prices continue to trend upward for all MSAs in Tennessee. In Q1 2022, the Jackson MSA saw the largest increase in home prices from last year of 27.1%, with the Nashville MSA and Clarksville MSA following close behind with annual increases of 26.8% and 26.1%, respectively.
Tennessee and the United States also continue the trend of rising home prices both quarterly and annually. Tennessee saw a quarterly increase in home prices of 5.06%, and the United States saw a rise of 3.60%. Annually Tennessee saw an increase of 25.2% in home prices while the United States saw an increase of 19.5%.
Mortgage Delinquencies and Foreclosures
In Q1 2022, the United States and Tennessee homeowners continued the trend of catching up on their delinquent mortgages from the height of the pandemic. The United States saw a quarterly decline of 0.67%, and Tennessee saw a decline of 0.79% in mortgage delinquencies. Annual mortgage delinquencies also fell by 1.79% for the United States and 2.28% for Tennessee.
Foreclosures have increased for both the United States and Tennessee quarterly and annually. The United States saw a quarterly and annual increase in foreclosures of 0.15%, while Tennessee saw a quarterly foreclosure rate increase of 0.12% and a yearly increase of 0.13%.
The two aspects of note are the tandem increase of home prices with the general price level of goods and the changes in foreclosure rates concerning mortgage delinquencies. Tennessee home prices are increasing exponentially while the United States, though growing, is increasing at a decreasing rate relative to Tennessee. The foreclosure rates are interesting for both Tennessee and the United States because, even though homeowners are more caught up on their mortgages than they were prior to the pandemic, we see foreclosure rates that are around the same as pre-pandemic levels.